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Assignment:
A certain item costs Rs. 235 per ton. The annual requirement is 60 tons and each time the stock is replenished, there is a set up cost of Rs. 1000. The cost of holding of inventory has been estimated at 10% of the value of the stock per year.
a) What is the economic order quantity (EOQ)?
b) Calculate the reorder level of the item if lead time is 1 month.
c) Calculate EOQ if the capital available to purchase the items is Rs. 1,000,000/-.
d) Calculate EOQ if 5% discount is given when purchasing more than 15 items.
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