The document contains numerical problems related to inventory management and economic order quantity (EOQ). It provides data on annual demand, ordering costs, carrying costs, and unit purchase prices. It then shows the calculations to determine the EOQ, total annual costs, number of orders, and time between orders for each problem. The optimal order quantities and costs are identified based on minimizing total annual inventory costs.
2. Ques 1:- The purchase manager currently follows EOQ policy of ordering for an item in the stores of his company. The annual demand of the item is 1600 units. Its carrying costs is 40% of the unit cost where the unit cost is Rs 400. The ordering cost is Rs 500 per order. Recently the vendor is supplying that item gives a discount of 10% in its unit cost if the order size is minimum of 500 units (a) Find the EOQ and the corresponding total cost per year. (b) Check whether the discount offer given by the vendor can be considered by the purchase manager. Solution: The data of the problem are:- D=1600 Units per year S=Rs 500 per order H= 0.4*400=Rs 160 per unit per year
3. Therefore, the economic order quantity TC =PD+D.S/Q+Q.H/2 = 400.1600+1600.500/100+100.160/2 =656000 per year For Proposed ordering system Minimum order size (Q)=500 Units Price (after 10% discount)=Rs 360 H=0.4*360=Rs144 EOQ= =100 Units
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5. Ques 2. A company currently purchases one of its items for Rs. 2 per unit. The Ordering cost is Rs. 20 per order and the Carrying cost is 20% of its purchase price per unit per year. The annual demand is 2500 units. A new vendor offers quantity discount for the same item as showed: Calculate Best Order Quantity, No. of Orders & Cycle Time Quantity Price per Unit (Rs.) Discounted Price Less than 1500 Units Rs. 2 Rs. 2 1500 - 2500 Units 97% of Rs. 2 Rs. 1.94 2500 & more Units 95% of Rs. 2 Rs. 1.90
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10. Ques 4. The Annual demand of an item in the stores of a foundry is 9000 units. Its annual carrying cost is 15% of the purchase price of the item per year, where the purchase price is 20Rs per unit. The ordering cost is 15Rs per order. Presently the order size of the item is the average monthly demand that item. Find the EOQ and compare its cost with the ordering system and find the corresponding cost advantage if exists?
17. Question:-Annual demand for an item is 6000 units. Ordering cost is Rs.600 per order. Inventory carrying cost is 18% of the purpose price /units/year. Theprice breakups are as below. Quantity price (in Rs.)Per units 0≤Q1<2000 20 2000≤Q2<4000 15 4000≤Q3 9 Find the optimal order size.
