The following is the information (extract) relating to Material Alpha required for a manufacturing company: Ordering...

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The following is the information (extract) relating to Material Alpha required for a manufacturing company: Ordering quantities (tonne) Price per ton (RM) Up to 200 6.00 250 but less than 800 5.90 800 but less than 2,000 5.80 5.70 2.000 but less than 4,000 4,000 and above 5.60 The annual demand for Material Alpha is 4,000 tonnes. Stock holding costs are 20% of material cost per annum. The delivery cost per order is RM6.00. Required: Prepare a statement showing computation of total inventory cost at different order sizes. Use the following table to calculate the relevant costs. Costs: Purchasing cost Ordering Cost ("no. of order x OC) Carrying cost (av, Inventory x cost/unit) Total Inventory Cost Ordering Quantities 200 250 800 2,000 4,000 The following is the information (extract) relating to Material Alpha required for a manufacturing company: Ordering quantities (tonne) Price per ton (RM) Up to 200 6.00 250 but less than 800 5.90 800 but less than 2,000 5.80 5.70 2.000 but less than 4,000 4,000 and above 5.60 The annual demand for Material Alpha is 4,000 tonnes. Stock holding costs are 20% of material cost per annum. The delivery cost per order is RM6.00. Required: Prepare a statement showing computation of total inventory cost at different order sizes. Use the following table to calculate the relevant costs. Costs: Purchasing cost Ordering Cost ("no. of order x OC) Carrying cost (av, Inventory x cost/unit) Total Inventory Cost Ordering Quantities 200 250 800 2,000 4,000

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To compute the total inventory cost at different order sizes for Material Alpha we need to consider both the purchasing cost and the carrying cost Giv... View the full answer