The production department of a company requires 3,600 kg of raw material for manufacturing a particular item per year. It has been estimated that the cost of placing an order is Rs 36 and the cost of carrying inventory is 25 per cent of the investment in the inventories. The price is Rs 10 per kg. Help the purchase manager to determine: (1) The optimal lot size. (ii) The optimal order cycle time Per year minimum total inventory variable cost Per year minimum total inventory cost (iii) (iv)
The production department of a company requires 3,600 kg of raw material for manufacturing a particular item per year. It has been estimated that the cost of placing an order is Rs 36 and the cost of carrying inventory is 25 per cent of the investment in the inventories. The price is Rs 10 per kg. Help the purchase manager to determine: (1) The optimal lot size. (ii) The optimal order cycle time Per year minimum total inventory variable cost Per year minimum total inventory cost (iii) (iv)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The production department of a company requires 3,600 kg of raw material for manufacturing a particular item per year. It has been estimated that the cost of placing an order is Rs 36 and the cost of carrying inventory is 25 per cent of the investment in the inventories. The price is Rs 10 per kg. Help the purchase manager to determine: (1) The optimal lot size. (ii) The optimal order cycle time Per year minimum total inventory variable cost Per year minimum total inventory cost (iii) (iv)
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