danger level means please solve
Answers
Answer:
means खतरे का स्तर।।।।।।।।
Explanation:
Danger Level of Material Formula
The danger level can be calculated by applying the following formula:
Danger Level = Average consumption x Maximum Re-order period for emergency purchases
Some concerns fix danger level below the re-ordering level but above the minimum level. If action for purchase is taken as soon as the stock reaches the re-ordering level, the danger level bears no importance except that, when the stock reaches the danger level (but not yet the minimum level) a reference may be made to the purchase department to ensure that delivery is received before the actual stock reaches the minimum level.
When the danger level is fixed below the minimum, it being reaches by the actual stock, the defect in the system is identified and corrective measure becomes necessary. When the danger level is fixed above the minimum, it being reached by the actual stock, preventive measure is to be taken so that the stock may not go below the minimum level.
It is the point or level of stock which the material stock should never be allowed to reduce. It is generally a level below the minimum level. As soon as the stock of material reaches this point, urgent action is needed for replenishment of stock. This done as follows:
Re-order Quantity: The quantity which is ordered at re-order point is called re-order quantity. This is determined on the basis of minimum stock level and maximum stock level. This is normally used in notation of economic order quantity.
Numerical Solved Examples
Example : Calculate (i) Re-order Level; (ii) Minimum Level; and (iii) Maximum Level for each Component A and from the following information:
Normal Usage 50 Units per week each
Minimum Usage 25 Units per week each
Maximum Usage 75 Units per week each
Re-order Quantity A: 300 Units; B: 500 Units
Re-order Period A: 4 to 6 weeks; B: 2 to 4 weeks
Solution:
(i) Re-order Level = Maximum Usage × Maximum Re-order Period
For Component A = 75 × 6 = 450 Units
For Component B = 75 × 4 = 300 Units
(ii) Minimum Level = Re-order Level – (Normal Usage × Average Re-order Period)
For Component A = 450 – (50 × 5) = 200 Units
For Component B = 300 – (50 × 3) = 150 Units
Note: Average Re-order Period for Component A = 4+6/2 = 5
Average Re-order Period for Component B = 2+4/2 = 3
(iii) Maximum Level = (Re-order Level + Re-order Quantity – (Minimum Usage × Minimum Re-order Period)
For Component A = (450 + 300) – (25 × 4)
= 650 Units
For Component B = (300 + 500) – (25 × 2)
= 750 Units
Example : From the following particulars, calculate: (a) Re-order Level (b) Minimum Level, (c) Maximum Level, (d) Average Level:
Normal Usage 100 units per day
Minimum Usage 60 units per day
Maximum Usage 130 units per day
Economic Order Quantity 5,000 units
Re-order Period 25 to 30 days
Solution:
(a) Re-order Level = Maximum Usage × Maximum Re-order Period
= 130 × 30 = 3,900 units
(b) Minimum Level = Re-order Level – (Normal Usage × Average Re-order Period)
= 3,900 – (100 × 27.5) = 1.150 units
Note: Average Re-order Period = 25+30/2 = 27.5 days
(c) Maximum Level = (Re-order Level + Re-order Quantity or EOQ)
– (Minimum Usage × Minimum Re-order Period)
= (3,900 + 5,000) – 60 × 25)
= 7,400 Units
(d) Average Level = Minimum Level +Maximum Level/2 = 27.5
= 1150+7400/2 = 4, 275 Units
Example : A manufacturer buys costing equipment from out side suppliers Rs. 30 per unit. Total annual needs are 800 units. The following data is available:
Annual Return on Investment 10%
Rent, Insurance etc. per unit per year Re. 1
Cost of Placing an order Rs. 100
Determine Economic Order Quantity.
Solution:
Economic Order Quantity.
Where, EOQ = Economic Order Quantity
R = Annual Requirement of Inventory
Cp = Cost of placing an order
CH = Annual holding Or Carrying cost per unit per year.
Given: R = 800 units, Cp = Rs. 100, CH = Rs. 4
Economic Order Quantity.
Example : Fair Deal Limited uses Rs. 1,00,000 materials per year. The administration cost per purchase in Rs. 100 and the carrying cost is 20% of the average inventory. The company has a purchase policy on the basis of economic order quantity but has been offered a discount of 0.5% in the case of purchase five times per year. Advise the company whether it should accept new offer or not?