Question

Question 2: Muscat Tubes Manufacturing LLC are the manufacturer of picture tubes for T.V. The following are the details of their operation during 2019. Rate of consumption per week is 200 units for Muscat Tubes Manufacturing LLC. Company estimated inventory carrying cost at 20% per annum. The ordering cost per order is RO 100. The cost incurred for purchasing a tube is RO 500. The rate of consumption per week is 100 to 300 units and lead time to supply is 6 to 8 weeks. During emergency purchase the lead time is 2 weeks.

Calculate the following:

a. Reorder level

b. Maximum level of stock

c. Minimum level of stock

d. Average level of stock

e. Danger Level

f. Economic Order Quantity

g. Economic Order Frequency

h. Number of orders per year

i. Total annual ordering and carrying cost at EOQ

Answer 1

your answer:

Given:

average rate of consumption=200 units

carrying cost = 20%

ordering cost per order = 100

cost per Tube= 500

minimum consumption =100 units , max consumption = 300

minimum reorder period =6 weeks , max reorder period= 8 weeks

emergency delivery time= 2 weeks

all levels are explained in the following pictures:

Answered for all levels to your understandle format I did some levels first and some are last hope you will understand it.