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

Explain risks to a broad generic business strategy, What are some drawbacks...

What are some drawbacks and risks to a broad generic business strategy? To a focused strategy?

What factors would you consider in promotions distribution c, As the Market...

As the Marketing Manager for Proctor and Gambles Pet Nutrition and Care division you have been asked to consider launching a new dog food product in Mexico. What factors would you

Explain monitor and report project progress, How can the project baseline a...

How can the project baseline and the earned value approach for variance analysis be used to monitor and report project progress?

Bar chart - scheduling, Bar Chart - Scheduling A pictorial chart also ...

Bar Chart - Scheduling A pictorial chart also known as the bar chart was developed by Henry L. Gantt around 1990 and is used to deal with complex activities. Out of the variou

Describe the problems of homelessness, Explain the problems of homelessness...

Explain the problems of homelessness based upon the developmental, situational, and human needs perspectives, what make a person become homeless, when they are well educated and no

Explain how did social media play a role in these uprisings, 1 What the spa...

1 What the spark that started the current uprisings in the Middle East? Explain. 2 Apply your knowledge of the importance of Rule of Law into the current uprisings in the Middle

Explian more and more people working together is called, The inefficiencies...

The inefficiencies created by more and more people working together is called

Explain the current break-even point in dollars is, The local convenience s...

The local convenience store makes bread. Currently, their oven can produce 50 pieces of bread per hour. It has a fixed cost of $2,000, and a variable cost of $0.25 per bread. The o

Explain advantages and disadvantages of membership, Define the use of regio...

Define the use of regional trade organizations in international business. Identify the Regional Trade Organization of which the United States is a member. What are some of the adva

HR functions, What are teh Pros and Cons of gentralizing or decentralizing ...

What are teh Pros and Cons of gentralizing or decentralizing HR functions as it relates to organization relationships?

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