Assignment 2

1. A producert purchases an item at the rate of Rs 10/- per piece from a manufacturer. The annual requirement is 2000 units of the item, while the cost per order is Rs 15/- and the holding cost is Rs 8/- per annum. There is a requirement of 5 square feet to store the item.

1. Calculate the economic order quantity (EOQ) of a product. (3 marks)

2. Calculate the cost of maintaining the inventory. (3 marks)

3. Calculate the reorder level of the products if lead time is 20 days. (3 marks)

4. If the stock out cost is Rs. 10/- per unit per month, calculate the EOQ level. (3 marks)

5. If maximum storage capacity is 300 square feet, calculate the EOQ level. (2 marks)

6. If a discount of 2% is offered for orders greater than 50 units but less than 100 units and 3% discount is offered for orders equal or greater than 100 units, calculate the inventory costs for the following scenarios:

1. Order size <=50

2. 50 < Order size < 100

3. 100 <= Order size (9 marks)

7. Calculate the EOQ if the total budget available to purchase the material is Rs. 1,000/-.

(2 marks)

(Total: 25 marks)