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 responsibilities is to manage the supplies of the University. One of your suppliers 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 (i) the types of inventory counting systems available, (ii) the new technology available for collecting data?


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

Estimate the mean and standard deviation, 1. How do variables and attribute...

1. How do variables and attributes differ?  2. Estimate the mean and standard deviation of the following measurements.

Explain graphically depict the interaction among its lunch, Big Bobs Burger...

Big Bobs Burger Barn would like to graphically depict the interaction among its lunch- ordering customers and its three employees. Customers come into the restaurant and eat there,

Explain diagnostic equipment and communications, Last year, the manager of ...

Last year, the manager of the service department at East Woods Ford instituted a customer opinion program to find out how to improve service. One week after service on a vehicle wa

Explain types of organizational culture, Choose two specific features of or...

Choose two specific features of organizational structure described in chapters 5, 6, 8, and/or 9 and discuss how these specific features might lead to specific types of organizatio

Explain impact an organizations ability to compete, Why are aggregate and s...

Why are aggregate and succession planning of critical importance? How might failures in these areas impact an organizations ability to compete? Be specific

Increased involvement in the colonies use examples, As mentioned in the att...

As mentioned in the attached reading on Revolutionary radicalism, the colonial response to British laws following the French and Indian War was extremely violent in many cases. Ma

How following has been cited as recommendation for changing, which of the f...

which of the following has been cited as a recommendation for changing structure and perfection to address the leakingipeline/1.create origination culture more satiating to women//

Machine load chart, Machine Load Chart In machine load chart time is m...

Machine Load Chart In machine load chart time is marked along horizontal axis and various machines are marked along the vertical axis. The orders by their number Have been mar

Factors determining production control, Factors Determining Production Cont...

Factors Determining Production Control 1. Nature of Production: In job oriented manufacturing products and operations designed for some particular order which may or may not b

Describe implications for the video game industry, Case Study- Implications...

Case Study- Implications for the Video Game Industry To consider the viability of Nintendo's new strategy, the CEO of Nintendo, has brought you in as a consultant. Your task is

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