Question: 35. Using the relevant data from the following information, calculate economic order quantity and reorder level when (i) stockouts are not permitted, and (ii) when

35. Using the relevant data from the following information, calculate economic order quantity and reorder level when (i) stockouts are not permitted, and (ii) when stockouts are permitted

Uniformly distributed annual demand for the item Cost of placing an order

Uniformly distributed annual demand for the item Cost of placing an order = 24,000 units = Rs 20 Cost of receiving, inspecting and checking a delivery = Rs 70 Cost of carrying stock Shortage cost per unit per year Lead time Interest paid by the company on funds employed Cost of extra storage facilities = Rs 3 per unit per annum = Rs 2 1/24th of a year = 12% per annum Rs 600 per annum.

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