What order quantity will minimize the total inventory cost, Operation Management

Assignment Help:

Question:

You are the Operations Manager at Alien University and one of your responsibility is to manage the supplies of the University. One of your supplier has given you quantity discounts for the purchase of marker pens. The normal cost for the marker pen is Rs 5.00. For orders between 1,000 and 1.999 units, the unit cost drops to Rs 4.80; for orders of 2,000 or more units, the unit cost is only Rs 4.75. Furthermore, ordering cost is Rs 49.00 per order and from your records you found that the University uses 5,000 marker pens per year. You have estimated that the inventory carrying charge is 20% of unit cost.

a) What order quantity will minimize the total inventory cost?

b) Since your University is a good customer, the supplier has offered another price break. If you order 2,500 or more marker pens at a time, the unit cost drops to Rs 4.60. What is the optimal order quantity now?

c) Management of the Alien University is seeking your advice to improve inventory management at the University. Could you please suggest the types of inventory counting systems available and new technology for collecting data?


Related Discussions:- What order quantity will minimize the total inventory cost

LOCATION AND LAYOUT, WHAT WOULD BE A GOOD RESEARCH QUESTION ON THIS TOPIC F...

WHAT WOULD BE A GOOD RESEARCH QUESTION ON THIS TOPIC FOR A GROUP PROJECT

Costco, What do its Operations managers do at Costco?

What do its Operations managers do at Costco?

Describe the various stages in team development, Question 1: (a) Descri...

Question 1: (a) Describe the various stages in team development. (b) What are the characteristics of an effective work team? Question 2: (a) Define Leadership. (b)

Explain how many storage rooms of each size to build, Personal Mini Warehou...

Personal Mini Warehouses is planning to expand its successful Nashua business into Lowell. In doing so, the company must determine how many storage rooms of each size to build. The

Calculate the expected value, C and S Metal company produces stainless stee...

C and S Metal company produces stainless steel pots and pans. C and S can pursue either of two distribution plans for the coming year. The firm can either produce pots and pans for

Explain improving productivity, Explain Improving Productivity. Improv...

Explain Improving Productivity. Improving Productivity: The production essence is creation of goods, may be by the transformation of raw materials or through assembling vario

Explain why is it important to continuously update, Why is it important to ...

Why is it important to continuously update the implementation and communication of a strategic plan?

Explain disadvantages of functional systems and briefly, In this case study...

In this case study, you will review a case involving a functional system. The Lynx Company uses a functional system for their sales system. It takes the orders from their salesm

Define in haifa israel its illegal to take what to the beach, In Haifa Isra...

In Haifa Israel its illegal to take what to the beach

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