Guidelines:

This assignment is based on the concepts of inventory models, queuing models, network models and simulation. You may refer the material in the E-learn course for further knowledge.

Question 1

A dealer supplies you the following information regarding a product dealt-in by him:

Annual demand = 10,000 units

Ordering cost = Rs. 1,000 per order

Holding cost = Rs. 400 per month

Price = Rs. 20 per unit

To store the product 10 square feet is required.

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

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

c)Calculate the reorder level of the products if lead time is 5 days.(3 marks)

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

e)If maximum storage capacity is 200 square feet, calculate the EOQ level. (2 marks)

f)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:

i)Order size <=50

ii)50 < Order size < 100

iii)100 <= Order size(9 marks)

g)Calculate the EOQ if the total budget available to purchase the material is Rs. 10,000/-.