Calculate the economic order quantity, Operation Management

Assignment Help:

The Managing Director of Beauty Soaps Ltd just visited a soap manufacturing firm in Malaysia and he was immensely impressed by its raw materials stock management System. He wanted his Operations manager to implement the just-in-time stock management system in his unit in order to eliminate all the costs associated with keeping stocks. For the Operations manager the local conditions are not conducive for the implementation of such a system. The main raw materials are sodium palmitate noodles, colour and perfume, imported from Malaysia. Wrappers and cartons are produced locally.

(a) Discuss the various costs associated with keeping costs.

(b) Discuss the conditions to be present in order to enable the successful implementation of just-in-time stock management system.

(c) A trader expects to sell about 300 units of a component per month. The storage space taken up by one unit of the product is estimated at Rs 30 per year. The cost associated with ordering is Rs 65 per order and interest rates are expected to be 10% per year. Each unit costs Rs 50.

(i) Calculate the economic order quantity ?
(ii) Calculate the total cost of the component for one year.
(iii) A supplier came up with an offer of supplying the same component at Rs 40 per unit, if the ordering quantity is 600 units per order. Should the trader accept the order?


Related Discussions:- Calculate the economic order quantity

Question eXAM, Defining Operation Management Operations performance...

Defining Operation Management Operations performance Function of operations Evolution of operations management E-business Integrated value c

Explain king henrys impact on the rule of law, Answer the following questio...

Answer the following questions on the Topic of The History of the American Corporation 1. Describe what is the rule of law and its importance on a successful capitalistic socie

Explain grievances handling, Explain grievances handling. Grievances H...

Explain grievances handling. Grievances Handling: Individual workers generally have some complaints termed as grievances against the working rules of the business enterprise,

Explain factors in the operating environment, The model below depicts indus...

The model below depicts industry analysis and a funnel that focuses on remote factor analysis to better understand the impact of factors in Aubrey environment you find the small sa

Explain companies doing acquisitions and mergers in future, Based on your r...

Based on your research of the United and Continental Airline merger, evaluate the challenges experienced during the merger and the resulting impact to the business. Assess the effe

In a transportation problem only used in a maxmin problem, In a transportat...

In a transportation problem, shipments from a dummy origin A Should be given a small cost to maximize their use B Should be given a large cost to prevent their use C Ar

Describe what is role of a cio in todays global business, 1. What is the ro...

1. What is the role of a CIO in today's global business environment? 2. Dr. Carr presents a good argument in the "IT doesn't matter" reading. Present your view of Carr's central

Courtesy - customer satisfaction and service quality, Courtesy - Customer S...

Courtesy - Customer Satisfaction and Service Quality Involves politeness, respect, consideration and friendliness of contact personnel (including receptionists, telephone oper

Describe what would the roe on the investment, Dilution In the previous pro...

Dilution In the previous problem, what would the ROE on the investment have to be if we wanted the price after the offering to be $73 per share (assume the PE ratio still remains c

Explain labor is relatively inexpensive in the grocery store, The fact that...

The fact that supermarkets, a land-intensive form of organization, have become the dominant form of grocery store in the United States suggests that 1. land is a relatively inex

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd