Question

Normal consumption
(b) Calculate the EOQ of a material from the following information:
Annual usage
80,000 units
Buying cost per unit
20
10% of cost
Inventory carrying cost
Cost per unit
50
Ans.: (a) (i) Maximum Level = 2,900 units; (ii) Minimum Level = 900 units ; (iii) Re-ordering Level
= 2,400 units.
(b) EOQ = 800 units.
Two components A and B, are used as follows:
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
Calculate for each component : (a) Re-order Level ; (b) Minimum Level ; (c) Maximum Level
(d) Average Stock Level.
Ans.: (a) Re-order Level : A = 450 units, B = 300 units ; (b) Minimum Level : A = 200 units, B = 150
units ; (c) Maximum Level : A = 650 units, B = 750 units; (d) Average Stock Level : A = 425
units, B = 450 units.​

Answer 1

i will answer it to maximum level for weeks in order to secure minimum level.