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3' A manufacturer has to supply his customers 36O0 units of his product per year-
5. Indian telecor
Inventory carrying cost amounts to Rs.l.2 per unit per annum. brderingcost per
of Rs.l2,5OO
run is Rs.go. Find a)EoO b) Optimum number of oiders per annum c) iaireimum cost is Rs.48
r
annual average inventory cost d) opumum period of supply per optimum order.
Determine EC
Soluhon:
Solutircn:
Giuen, Annual demand, A = 360o, Inventory carrying cost, c = I.2/unit/annura
Giuen Annual
Ordering cost, P= 80/order
Ordering cost
2x3600x80
= 692.82 = 693 units
t.2 a) We know.1
c) Totat inuentory
-
cost=9*c+{xr= 693
xl.2+ tf,-o9r.g0=Rs.BSl.B8 6. A manufactu
2 A 2 693"vv-'re'vvr'v
requirements
d) Number of orders/ 1r€4r = E orders ordering cost
inventory pei
.'. Optimum period of supply per optimum order purchase poU
=!c =O.24ears save the cornl
4' Usha corporation currently practices the following system for the procurement of
an item. No. of orders in a year = 8, ordering costlris .7\o/order, 6ach time order Solufron:
quanttty =250.units, carrying cost = 40% and, cost of each unit Rs.40/-. Giuen Annt
Comment on the ordering policy of the company and estimate the loss =
to the 2Ox O.15=3
company in not practicing scientific inventory policy.
Solutfon: We know, Q =
Giuen, Annual demand, A = 25o x g = 2o00, Inventory carr5ring cost,
e=
40x 0.4 = 16 /unit/annum, Ordering cost, p = 750/order Totat intsertto
Optimum ntt
b) Totol inuentory cost=9xc +{xr= 4:3
2 A 2 xr6 +'90-0,
€B' TSo =Rs.6928.2 Total cost oJ it
t3 Problerns :
E. factory warehouse at
A plant producrng a lirr of hydraulic values can supply the year at a unit selling
& I.
the rate of Tfilm)nth' The **Lf'o""" ships 3000 valves
per
plants oriering cost of Rs'30O and the inventory
price of Rr.Z;d. C;;tdering the
carrying of 2Oo/o. wt.l !""rruu"" snolutA be the wzyes hose order from
the plant."oJot"
Soluhon:
t€t,o=thequantity,thewarehouseshouldorderfromtheplant.
A = Number of items consumed per year = 3000
P = Ordering and set up cost/order = Rs'300
C = Annual inventory carrying cost/item/annum
Total annuul it'"ttoty "tttyitg
=mryear "oS
2AP
= 189.7 say 190 units
C
--12'24=L2
b) optimumnumberof
orders/aruru
^= W=#
cost' c =
:::::" Annuar
g'fr"'iti;;';'
demand'
ordering cost' P = 1S/order
^j-lo-?o;"*]?":1?[,0"i*s
20x 0.15 =