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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.
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Explain how probability is used in that situation.
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Service Level Agreements are normally associated with Outsourcing.
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define process strategy
What is the major difference between aggregate planning in manufacturing and aggregate planning in services? Provide and explain to examples.
Provide 4 examples of different external or internal events that may trigger an organization to reorganize (i.e., decrease in hospital volume).
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