Detrmine the economic order quantity, Operation Management

Assignment Help:

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.


Related Discussions:- Detrmine the economic order quantity

Explain planning is the fundamental management function, 1. Planning is the...

1. Planning is the fundamental management function. Discuss how organizing and planning are related. 2. Using two examples, describe the different approaches used by companies/m

Illustrate the examples of the inventory control systems, Illustrate the ex...

Illustrate the examples of the inventory control systems? Examples of inventory control systems Reorder level systems: When the current stock level decreased below a

Evolutipn of operation management, discuss the evolution of operations mana...

discuss the evolution of operations management in the last 10 years

Competence - customer satisfaction and service quality, Competence - Custom...

Competence - Customer Satisfaction and Service Quality Means possession of the required skills and knowledge to perform the service. It involves: knowledge and skill of the c

Connected flow and disconnected flow system, Connected Flow and Disconnecte...

Connected Flow and Disconnected Flow System Such systems deliver very low unit costs, they are vulnerable; because of the absence of work-in-progress buffers, if one process f

Service sector - financial services, Service Sector - Financial Services ...

Service Sector - Financial Services 1. Explosion of customer choice  2. Globalisation of financial services - extensive use of computer technology  3. Innovation on bot

Explain direct marketing association website, On the Direct Marketing Assoc...

On the Direct Marketing Association website, what is interesting, how can companies use the website, what information is surprising and why?

How supply chain change works, An online retailer of a single product has f...

An online retailer of a single product has four major markets in the four "corners" (North-East, South-East, North-West and South-West) of a country. Assume that daily demand in ea

Upper Control limit, Twenty-five samples of size thirty (30) were collected...

Twenty-five samples of size thirty (30) were collected and a total of 48 nonconforming items were found yielding p-bar = 0.064. The three sigma upper control limit (UCL) for a p co

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