The following details relate to materials used by Ohiahyeda manufacturing enterprise to produce its product. Normal consumption 4,000 Normal delivery period 5years Maximum consumption 5,000 Minimum delivery period 3years The firm uses 400units per week for its production. The current unit cost of the material is GHȼ 40, the cost of ordering is GHȼ15 and the holding costs are estimated at 6% of material value per year. Required Calculate i. Maximum stock level ii. Minimum stock level iii. Average stock level
The following details relate to materials used by Ohiahyeda manufacturing enterprise to produce its product. Normal consumption 4,000 Normal delivery period 5years Maximum consumption 5,000 Minimum delivery period 3years The firm uses 400units per week for its production. The current unit cost of the material is GHȼ 40, the cost of ordering is GHȼ15 and the holding costs are estimated at 6% of material value per year. Required Calculate i. Maximum stock level ii. Minimum stock level iii. Average stock level
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following details relate to materials used by Ohiahyeda manufacturing enterprise to produce its product.
Normal consumption 4,000
Normal delivery period 5years
Maximum consumption 5,000
Minimum delivery period 3years
The firm uses 400units per week for its production. The current unit cost of the material is GHȼ 40, the cost of ordering is GHȼ15 and the holding costs are estimated at 6% of material value per year.
Required
Calculate
i. Maximum stock level
ii. Minimum stock level
iii. Average stock level
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