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Inventory Management - Supply Chain Management
Determination of the best ordering policy in a manufacturing organisation
In a manufacturing organisation, procurement may have the legal responsibility to source external products and services. The procurement function has been growing in recent years as the budget has grown along with increased complexities of increased procurement volume and global location of vendors.
Consider that the largest single vendor to the Ford Motor Company in the US is Blue Shield insurance. In manufacturing companies, an important aspect of procurement is the calculation of an economic order quantity (EOQ) or the calculation of a discount order quantity.
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1. The Marlin Company operates 50 weeks a year, and its cost of goods sold last year was $1,500,000. The firm carries six items in inventory: three raw materials, two work-in-proce
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