Raya PKP Bhd. manufactures lamps. The following are the details of their operation during 2020: Average monthly market demand 2,000 lamps Ordering cost RM200 per order Inventory carrying cost RM200 per lamp per annum Cost of lamps RM1000 per lamp Minimum usage 50 lamps per week Maximum usage 200 lamps per week Lead time to supply 4 - 6 weeks
Raya PKP Bhd. manufactures lamps. The following are the details of their operation during 2020: Average monthly market demand 2,000 lamps Ordering cost RM200 per order Inventory carrying cost RM200 per lamp per annum Cost of lamps RM1000 per lamp Minimum usage 50 lamps per week Maximum usage 200 lamps per week Lead time to supply 4 - 6 weeks
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Calculate:
> Economic order quantity.
> Maximum level of stocks.
> Minimum level of stocks.
> Re-order level of stocks.
> Total costs of holding and carrying stocks.
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