Geliga Bhd. is a distributor of industrial product in Johor. Item A is one of the materials needed in the production process. Item A is consumed at a steady usage at 4000 units per annum. The costs of ordering item A are invariant with respect to order size. The ordering cost has been calculated at RM30 per order. Each order is checked by an employee engaged in using item A in production who earns RM5 per hour irrespective of his output. The employee generates a contribution of RM4 per hour when he not involved in material checks and the stock check takes 5 hours. Annual holding cost amount to RM15 per unit. Required: a. Calculate the optimal order size of item A. b. The supplier of item A has recently offered Geliga Bhd. a quantity discount of RM0.24 per unit on the current price of RM24, for all orders of 400 or more units of item A.
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.
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Geliga Bhd. is a distributor of industrial product in Johor. Item A is one of the materials needed in the production process. Item A is consumed at a steady usage at 4000 units per annum. The costs of ordering item A are invariant with respect to order size. The ordering cost has been calculated at RM30 per order. Each order is checked by an employee engaged in using item A in production who earns RM5 per hour irrespective of his output. The employee generates a contribution of RM4 per hour when he not involved in material checks and the stock check takes 5 hours. Annual holding cost amount to RM15 per unit.
Required:
a. Calculate the optimal order size of item A.
b. The supplier of item A has recently offered Geliga Bhd. a quantity discount of RM0.24 per unit on the current price of RM24, for all orders of 400 or more units of item A.
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