Ms Nadhirah opened a souvenir shop which she operates 36 weeks per year. Her top-selling product is an Avenger's mug collection. She able to sales about 10 units per week. Mug's supplier charges about RM30.00 per unit. Ordering cost is RM10.00. Annual holding cost is 25 percent of a mug's purchased price. As now, she chose a 100-unit per lot size for ordering the mug. (a) Calculate the cost of saving (2 decimal number) if she planned to use optimum lot size in her operation. (b) Ms Nadhirah wants to know whether this method is good or not for her operation. Therefore, list up TWO (2) advantages AND TWO (2) disadvantages if she adopts the new method in her operation.
Ms Nadhirah opened a souvenir shop which she operates 36 weeks per year. Her top-selling product is an Avenger's mug collection. She able to sales about 10 units per week. Mug's supplier charges about RM30.00 per unit. Ordering cost is RM10.00. Annual holding cost is 25 percent of a mug's purchased price. As now, she chose a 100-unit per lot size for ordering the mug. (a) Calculate the cost of saving (2 decimal number) if she planned to use optimum lot size in her operation. (b) Ms Nadhirah wants to know whether this method is good or not for her operation. Therefore, list up TWO (2) advantages AND TWO (2) disadvantages if she adopts the new method in her operation.
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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Transcribed Image Text:Ms Nadhirah opened a souvenir shop which she operates 36 weeks per year. Her top-selling
product is an Avenger's mug collection. She able to sales about 10 units per week. Mug's
supplier charges about RM30.00 per unit. Ordering cost is RM10.00. Annual holding cost is
25 percent of a mug's purchased price. As now, she chose a 100-unit per lot size for ordering
the mug.
(a) Calculate the cost of saving (2 decimal number) if she planned to use optimum lot size
in her operation.
(b) Ms Nadhirah wants to know whether this method is good or not for her operation.
Therefore, list up TWO (2) advantages AND TWO (2) disadvantages if she adopts the
new method in her operation.
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