ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but may sometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, the supplier may take 7 days. Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also an opportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450. If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order ten- days-worth of inventory. (C) Reorder Point and Economic Order Quantity 19. What would the average number of boxes be if the safety stock from Part A was kept and the EOQ from Part B was followed? Round off to two decimal places. 20. How much would the carrying cost for the year be based on item 19?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but may
sometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, the
supplier may take 7 days.
Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also an
opportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450.
If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order ten-
days-worth of inventory.
(C) Reorder Point and Economic Order Quantity
19. What would the average number of boxes be if the safety stock from Part A was kept and the EOQ from Part B
was followed? Round off to two decimal places.
20. How much would the carrying cost for the year be based on item 19?
21. How much would the total inventory related (ordering plus carrying) costs be if the economic order quantity was
followed (including safety stock)?
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