An electronic store uses continuous review policy to manage the inventory of its high selling monitor model. The monitor has the following characteristics. The annual demand for the monitor is (4000 *2) units per week. The monitors are bought from an offshore supplier at a unit price of 7000 AED per unit and each order costs 80000 AED. The holding cost of laptops is 25% of the value of the product. What would be the average time between orders (in weeks)? What would be the average inventory level? The electronic store is considering a local supplier. The ordering cost of the new supplier is 65000 AED however the unit price of the monitor is 9000 AED. Should the electronic store change its supplier
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.
An electronic store uses continuous review policy to manage the inventory of its high selling monitor model. The monitor has the following characteristics. The annual demand for the monitor is (4000 *2) units per week. The monitors are bought from an offshore supplier at a unit price of 7000 AED per unit and each order costs 80000 AED. The holding cost of laptops is 25% of the value of the product.
- What would be the average time between orders (in weeks)?
- What would be the average inventory level?
- The electronic store is considering a local supplier. The ordering cost of the new supplier is 65000 AED however the unit price of the monitor is 9000 AED. Should the electronic store change its supplier
Annual demand(D) = 4000*2*52 = 4,16,000 units
Unit price = 7000 AED
Ordering cost(S) = 80,000 AED
Holding cost(H) = 25%*7000 = 1750
Calculate EOQ = √((2*D*S)/H)
EOQ = √((2*4, 16,000*80, 000) /1750)
EOQ = √38034285.7
EOQ = 6167.19431 units
Calculate number of orders in a year
Number of order = D/Q
Number of order = 4,16,000/6167.19431
Number of order = 67.45369
Number of order per week = 1.297186
Step by step
Solved in 2 steps
