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 optimum batch production quantity, A job shop receives an order for...

A job shop receives an order for high precision formed parts. The cost of producing each part is approximately $20,000. The customer requires that either 4 or 5 good parts be suppl

Explain difference between two population means, In estimating the differen...

In estimating the difference between two population means, if a 95 percent confidence interval includes zero, then we can conclude that there is a 95 percent chance that the differ

Initiate an organizing campaign for the technical employees, 1) Company A w...

1) Company A wants to discourage unionization through the United Technical Workers of America. True or False: In order to do so, it can initiate an organizing campaign for the Tech

Explain geographic structure, When and under what conditions might managers...

When and under what conditions might managers change from a functional to A) a product structure B) geographic structure or C) a market structure? Give real-life examples of such a

Define what is the utilization rate of this service system, "Fast Eddie" Fl...

"Fast Eddie" Flournoy manages the service equipment division of Delta Airline's Atlanta terminal. He keeps a service crew on call to repair tow tractors that break down. Tractors b

Explain why organizations need good measures, 1. Both Juran and Deming adv...

1. Both Juran and Deming advocated ongoing product development. In fact, Deming's introductory lecture to Japanese managers in 1950 contrasted the old way of product design-desi

Describe why agency and your proposed regulation interests, Pick an adminis...

Pick an administrative agency of either the federal or a state government. Find where the current and proposed regulation changes for that agency are located on the Internet. (i.e.

Explain following is an inequality or equation that expresse, Which of the ...

Which of the following is an inequality or equation that expresses a restriction in a mathematical model? Decision variable Parameter Objective function Constraint N

Soft factors - factors affecting productivity improvement, Soft Factors - F...

Soft Factors - Factors Affecting Productivity Improvement People are the most important factor in any organisation, not only by the way in which they apply themselves to their

Explain the prediction method, The following data concerns fuel sales by a ...

The following data concerns fuel sales by a distributor and is given in thousands of gallons. A. For each of the cases predict the fuel sales for the next twelve-month period. C

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