Q5./Suppose that the demand for a product is 10000 per year and the items are withdrawn uniformly. The order cost is 1000$ and the inventory holding cost 65 per item per year. If shortages cost 5$ per item per year. Find: 1. The economic order quantity 2. Maximum inventory (I Max) 3. The number of ordering during the year (Order frequency) 4. The interval between two orders
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
![Q5./Suppose that the demand for a product is 10000 per year and the
items are withdrawn uniformly. The order cost is 1000$ and the inventory
holding cost 6$ per item per year. If shortages cost 5$ per item per year.
Find:
1. The economic order quantity
2. Maximum inventory (I Max)
3. The number of ordering during the year (Order frequency)
4. The interval between two orders](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F94330788-2149-4f5c-9760-2d7e6b21fa35%2Fa1e5f756-140e-4e09-bce4-9a9fb1a04f82%2F7nw5xxq_processed.jpeg&w=3840&q=75)
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