Question

20. A manufacturing company annually uses 25000 units of a raw material. The cost of the raw material is
*1.25 per unit. If the ordering cost of the material is 21.6 per order and the carrying cost is 5.4% per yea
of the average inventory.
(i) Find the inventory cost and the Economic Lot Size.
(ii) Should the manager be concerned if he is offered a discount of 6% on the cost price on a
single order of 25000 units by supplier?
(iii) Suppose the company works for 325 days a year. If the Lead time is 12 days and safety stock
is 400 units, find the order point.​

Answer 1

Explanation:

explained by -YAMRAAJ