A firm is faced with the attractive situation in which it can obtain immediate delivery of an itemit stocks for retail sale. The firm has therefore not bothered to order the item in any systematicway. Recently, however, profits have been squeezed due to increasing competitive pressures, andthe firm has retained a management consultant to study its inventory management. The consultanthas determined that the various costs associated with making an order for the item stockedare approximately $30 per order. She has also determined that the costs of carrying the item ininventory amount to approximately $20 per unit per year (primarily direct storage costs and foregoneprofit on investment in inventory). Demand for the item is reasonably constant over time and the forecast is for 19,200 units per year. When an order is placed for the item, the entire orderis immediately delivered to the firm by the supplier. The firm operates 6 days a week plus afew Sundays, or approximately 320 days per year. Determine The total annual inventory costs
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
A firm is faced with the attractive situation in which it can obtain immediate delivery of an item
it stocks for retail sale. The firm has therefore not bothered to order the item in any systematic
way. Recently, however, profits have been squeezed due to increasing competitive pressures, and
the firm has retained a management consultant to study its inventory management. The consultant
has determined that the various costs associated with making an order for the item stocked
are approximately $30 per order. She has also determined that the costs of carrying the item in
inventory amount to approximately $20 per unit per year (primarily direct storage costs and foregone
profit on investment in inventory). Demand for the item is reasonably constant over time and the
is immediately delivered to the firm by the supplier. The firm operates 6 days a week plus a
few Sundays, or approximately 320 days per year. Determine The total annual inventory costs
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
