On average, PT. ABH would order from PT. GDAM 1.000.000 kg Crude Palm Oil (CPO) every month to be used as the raw materials for its production. This amount of CPO is refined and processed to produce cooking oils. The inventory is depleted each month and needs to be reordered. If the carrying cost is IDR 32.000 and the fixed order cost is IDR 4.000.000 (Assume a 360-day year) a. Does PT. ABH already follows an economically advisable strategy? b. If it is further noted that PT.ABH procurement team takes 10 days to place and receive an order and the firm’s production policy requires it to hold 50.000 kg as safety stock to prevent against stockouts. Determine the reorder point that must be set
On average, PT. ABH would order from PT. GDAM 1.000.000 kg Crude Palm Oil (CPO) every month to be used as the raw materials for its production. This amount of CPO is refined and processed to produce cooking oils. The inventory is depleted each month and needs to be reordered. If the carrying cost is IDR 32.000 and the fixed order cost is IDR 4.000.000 (Assume a 360-day year)
a. Does PT. ABH already follows an economically advisable strategy?
b. If it is further noted that PT.ABH procurement team takes 10 days to place and receive an order and the firm’s production policy requires it to hold 50.000 kg as safety stock to prevent against stockouts. Determine the reorder point that must be set
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