The expected demand of a product of SummerCo is Jan-Mar: 30K, Apr-June: 20K, Jul-Sep: 40 K and
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Question:
The expected demand of a product of SummerCo is Jan-Mar: 30K, Apr-June: 20K, Jul-Sep: 40 K and Oct-Dec: 10K. Each unit of the item sells for Rs 400. The annual cost of the procurement in the last year was Rs 105 lakhs and the number of orders it processed are 3000. Compute
a) EOQ,
b) cycle inventory,
c) annual holding costs,
d) annual ordering costs,
e) average flow time,
f) reorder quantity if the lead time to supply the item is 3 weeks. Show all calculations. Use annul holding/carrying cost as 10% of price of the product.
Expert Answer:
in thousands Expected demand Unit price Expected Sales Qtrl 30000 400 12000000 Qtr2 20000 400 ... View the full answer
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