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

Explain business knowledge competencies, Business knowledge competencies ar...

Business knowledge competencies are particularly important for which human resource role? Answer A) management developer B) employee advocate C) strategic partner D) functional exp

Explain development impacted shangri la hotel strategy, Assess how employee...

Assess how employee training and development impacted Shangri La Hotel strategy to delight customer each and every time.

Explain project life cycle differ from a product life cycle, I asked the wr...

I asked the wrong question last time. I asked it wrong. How does a project life cycle differ from a product life cycle?

Potential advantages, Book Edition Company Book Edition Company p...

Book Edition Company Book Edition Company produces very rare cover pages for history books. Reader habits change a lot and they change their mind a lot. The cover pages a

Human resource practices which can impede customer service, Identify three ...

Identify three human resource practices that can impede customer service employees from delivering high quality service. Describe how you would modify each practice to promote high

Explain implementing a relational database, What benefits would Bill get fo...

What benefits would Bill get for his business from implementing a relational database? Your response must be tied directly to Bill's pizza stores.

Define difference between a stock dividend and a stock split, What is the d...

What is the difference between a stock dividend and a stock split? As a stockholder, would you prefer to see your company declares a 100 percent stock dividend or two-for-one split

Road transportation business, After working for 30 years, Ramjee Somjee Dut...

After working for 30 years, Ramjee Somjee Dutt opted for VRS and started a courier company and did very well in the first four years. He was now looking for expansion of his busine

Describe interface of financial policy, Explain Interface of Financial Poli...

Explain Interface of Financial Policy and Strategic Management?

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