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Question:
(a) ‘Stock is often said to be the biggest evil in any business, yet firms still keep stocks.' Discuss the reasons for keeping stocks.
(b) Discuss the main costs involved in keeping stocks.
(c ) The demand per month for a spare part is 200 units. The storage space cost per unit per year is Rs20. The cost for ordering the spare part is Rs35 per order. Each unit of the spare part is Rs150 and interest rate is at 10%.
(i) Detrmine the economic order quantity.
(ii) Find the total cost.
(iii) The purchasing manager got an offer of a discounted price of Rs140 per unit if he orders in lot sizes of 600. By performing the necessary calculations indicate whether he should shift to the new policy instead of using the EOQ.
An electronics firm is currently manufacturing an item that has a variable cost of $.50 per unit and a selling price of $1.00 per unit. Fixed costs are $14,000 per month. Current d
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Given this information: Lead-time demand = 630 pounds Standard deviation of lead time demand = 40 pounds (Assume normality.) Acceptable stockout risk during lead time = 4
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Why do successful firms conduct marketing research for their products/services?
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