Question
In: Accounting
ABC discount store has the following product line in its product line; toys, apparels, kitchenware, food,...
ABC discount store has the following product line in its
product line; toys, apparels, kitchenware, food, jewelry,
furniture, health and fitness, consumer electronics, Giftware and
Fashion Apparel.
The annual demand of toys segment is 48000 units. The average
lead time is 4 weeks. The standard deviation of demand during the
average lead time is 75 units / week. The cost of ordering is Rs.
400 per order. The cost of purchase of the product is Rs. 10 per
unit. The cost of carrying per unit per year is 15% of the purchase
price. The maximum delay in lead time is 2 weeks and the
probability of this delay is 0.25. Assume a service level of
0.95.
The average price per toy is Rs. 13. The minimum usage per
week is 600 units and the minimum lead time is 3 weeks. The average
usage per week is 900 units.
(a) Find out EOQ, Reorder level, Total Cost of inventory at
EOQ, gross margin at EOQ and average inventory per year for toy
category.
(b) Calculate the GMROI (gross margin return on investment)
for toys category.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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