Metro Trading owned a factory to produce the automobile parts and has the following inventory, carrying and storage costs: 1. Annual Sales is 300,000 units. 2. The carrying cost is 20% of the purchase price; 3. The purchase price is RM25 per unit; 4. The ordering cost is RMI,500 per order, 5. The desired safety stock level 8,000 units; 6. The delivery time is I week (7days). d) What is the average inventory level? e) How much does the total annual inventory cost? f) Prepare a graph to shows your order point determination.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Metro Trading owned a factory to produce the automobile parts and has the following inventory,
carrying and storage costs:
1. Annual Sales is 300,000 units.
2. The carrying cost is 20% of the purchase price;
3. The purchase price is RM25 per unit;
4. The ordering cost is RMI,500 per order;
5. The desired safety stock level 8,000 units;
6. The delivery time is I week (7days).
d) What is the average inventory level?
e) How much does the total annual inventory cost?
f) Prepare a graph to shows your order point determination.
Transcribed Image Text:Metro Trading owned a factory to produce the automobile parts and has the following inventory, carrying and storage costs: 1. Annual Sales is 300,000 units. 2. The carrying cost is 20% of the purchase price; 3. The purchase price is RM25 per unit; 4. The ordering cost is RMI,500 per order; 5. The desired safety stock level 8,000 units; 6. The delivery time is I week (7days). d) What is the average inventory level? e) How much does the total annual inventory cost? f) Prepare a graph to shows your order point determination.
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