M/s Tubes Ltd. are the manufacturers of picture tubes for T.V. The following are the details of
Question:
M/s Tubes Ltd. are the manufacturers of picture tubes for T.V. The following are the details of their operation during 2007:
Compute from the above:
1. Economic Order Quantity. If the supplier is willing to supply quarterly 1,500 units at a discount of 5%, is it worth accepting?
2. Maximum level of stock.
3. Minimum level of stock.
4. Reorder level.
Transcribed Image Text:
Average monthly market demand Ordering cost Inventory carrying cost Cost of tubes Normal usage Minimum usage Maximum usage Lead time to supply 2,000 tubes Rs. 100 per order 20% per annum Rs. 500 per tube 100 tubes per week 50 tubes per week 200 tubes per week 6-8 weeks
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