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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Calculate: 

> Economic order quantity. 

 

> Maximum level of stocks. 

 

> Minimum level of stocks. 

 

> Re-order level of stocks. 

 

> Total costs of holding and carrying stocks. 

 

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
Transcribed Image Text: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
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