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A Publishing House Purchases 72

A publishing house purchases 72,000 rims of paper per year at Rs. 90 per rim. Ordering costs are Rs. 500 per order and carrying costs are 5% of inventory value per year. The normal lead time is 20 days with no safety stock. The publishing house must calculate the economic order quantity, reorder inventory level, and determine if it should accept a 1% discount for orders of 18,000 rims or more.

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1K views2 pages

A Publishing House Purchases 72

A publishing house purchases 72,000 rims of paper per year at Rs. 90 per rim. Ordering costs are Rs. 500 per order and carrying costs are 5% of inventory value per year. The normal lead time is 20 days with no safety stock. The publishing house must calculate the economic order quantity, reorder inventory level, and determine if it should accept a 1% discount for orders of 18,000 rims or more.

Uploaded by

peeplaz
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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A publishing house purchases 72,000 rims of a special type paper per annum at cost Rs. 90 per rim.

Ordering cost per order is Rs. 500 and the carrying cost is 5 per cent per year of the inventory cost. Normal lead time is 20 days and safety stock is NIL. Assume 300 working days in a year: You are required: (i) Calculate the Economic Order Quantity (E.O.Q). (ii) Calculate the Reorder Inventory Level. (iii) If a 1 per cent quantity discount is offered by the supplier for purchases in lots of 18,000 rims or more, should the publishing house accept the proposal?

A publishing house purchases 72,000 rims of a special type paper per annum at cost Rs. 90 per rim. Ordering cost per order is Rs. 500 and the carrying cost is 5 per cent per year of the inventory cost. Normal lead time is 20 days and safety stock is NIL. Assume 300 working days in a year: You are required: (i) Calculate the Economic Order Quantity (E.O.Q). (ii) Calculate the Reorder Inventory Level. (iii) If a 1 per cent quantity discount is offered by the supplier for purchases in lots of 18,000 rims or more, should the publishing house accept the proposal?

A publishing house purchases 72,000 rims of a special type paper per annum at cost Rs. 90 per rim. Ordering cost per order is Rs. 500 and the carrying cost is 5 per cent per year of the inventory cost. Normal lead time is 20 days and safety stock is NIL. Assume 300 working days in a year: You are required: (i) Calculate the Economic Order Quantity (E.O.Q). (ii) Calculate the Reorder Inventory Level. (iii) If a 1 per cent quantity discount is offered by the supplier for purchases in lots of 18,000 rims or more, should the publishing house accept the proposal?

A publishing house purchases 72,000 rims of a special type paper per annum at cost Rs. 90 per rim. Ordering cost per order is Rs. 500 and the carrying cost is 5 per cent per year of the inventory cost. Normal lead time is 20 days and safety stock is NIL. Assume 300 working days in a year:

You are required: (i) Calculate the Economic Order Quantity (E.O.Q). (ii) Calculate the Reorder Inventory Level. (iii) If a 1 per cent quantity discount is offered by the supplier for purchases in lots of 18,000 rims or more, should the publishing house accept the proposal?

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