Scribd
Upload
8 views

Tutorial 4. Inventory Control

Uploaded by

maizon.darus
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
8 views

Tutorial 4. Inventory Control

Uploaded by

maizon.darus
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

TUTORIAL 4

CHAPTER 3: INVENTORY CONTROL MODELS

1. Mr Sam sells printers for RM 600 each. The annual demand is 2200 units. The holding cost
is RM 12 per unit per year, while the cost of ordering is RM 36 per order. The lead time is
4 days for an order to arrive. Find
a) the economic order quantity?
b) the minimum annual inventory cost?

2. Hafiy Trading Company operates 300 days a year. It sells vacuum cleaners. The manager
of the company is trying to decide on an inventory and reorder policy for its vacuum
cleaners that cost RM 150 each. The demand is, on average, 5 units per day. Cost of
ordering is RM 25 per order and the holding cost is estimated to be 10% of the unit cost.
The lead time is 3 days.
a) What is the economic order quantity?
b) What is the number of orders per year?
c) What is the annual ordering cost?
d) What is the average inventory level?
e) How much is the annual holding cost?
f) What is the total annual inventory cost?

3. HH Company sells office table for RM 700 each. The annual demand is 3600 units. The
holding cost is RM 16 per unit per year while the ordering cost is RM 60 per order.
Currently, the company is ordering 12 times a year. It operates 300 days a year and the lead
time for order is 5 days.
a) What is the annual inventory cost for the current policy? How much is the holding
cost?
b) If the company uses the optimal inventory policy of EOQ model, find the
i. Optimal order quantity,
ii. Number of orders per year,
iii. Ordering cost,
iv. Annual holding cost, and
v. Total inventory cost.

4. Hasya Enterprise sells notebooks and the annual demand for the notebooks is 1800. The
cost of the notebook is RM 1200. It costs the company RM 44 to place an order and the
carrying costs 6% of the unit cost. If the notebooks are ordered in quantity of 300 units or
more, the company can obtain a discount of 8%. Determine whether the company should
take advantage of the offer. Find the optimal order quantity for the company, the annual
ordering cost, annual holding cost, annual unit costs and the total inventory cost.
5. HH trading company sells school bags and the annual demand is 2800 bags. It costs the
company RM 33 to place an order and the carrying cost is 7% of the unit cost. The cost of
each bag is RM 40. The supplier offers the following discounts to HH Company.

Order Quantity Discount Unit Cost


Below 100 units None RM 40
100 units and below 200 units 5% RM 38
200 units and more 7% RM 37.20

a) What would be the optimal order quantity?


b) What is the minimum annual inventory cost?

You might also like