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Category: (B) X 2,400 Units Y 1,800 Units X 4,800

This document provides information on stock levels for two components, X and Y. It includes their reorder quantities, normal and maximum usage rates, and reorder periods. It then calculates the reorder level, minimum level, and maximum level for each component based on the given information. It also provides a formula for calculating average stock level as minimum stock level plus a percentage of the reorder quantity.

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Abhijit Horo
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316 views

Category: (B) X 2,400 Units Y 1,800 Units X 4,800

This document provides information on stock levels for two components, X and Y. It includes their reorder quantities, normal and maximum usage rates, and reorder periods. It then calculates the reorder level, minimum level, and maximum level for each component based on the given information. It also provides a formula for calculating average stock level as minimum stock level plus a percentage of the reorder quantity.

Uploaded by

Abhijit Horo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Category 4 (Various Stock Levels)

Question: 29
Two components X and Y are used as follows:
Re-order quantity :X - 4,800 units, Y - 7,200 units
Normal usage -

600 units per week each


Re-order period: X - 4 to 6 weeks, Y - 2 to 4 weeks
Maximum usage -

900 units per week each

Minimum usage -

300 units per week each


Calculate for each component:

(a)
Re-order level (b) Minimum level (c) Maximum level (d) Average stock level
(a)X 5,400 units; Y 3,600 units
= (b)X 2,400 units; Y 1,800 units
Answer- (c) X 9,000 units; Y 10,200 units
= =
(d) X=4,800 units; Y 5,400 units
Using the formula: -

Average Stock level = Minimum Stock level+% (Re-order Quantity)


Question: 30
Zee is a product manufactured out of three raw materials M, N and 0.
Each unit of Zee requires 10 kg.,
are 15,000 kg., and 10,000
8 kg., and 6 kg., of M, N andO respectively. The re-order levels of M and N
of Zee varies from 300
kg., respectively while minimum level of O is 2,500 kg. The weekly production
to 500 units while weekly average production is 400 units.
You are required to compute:
(i) Maximum stock level of N (iii) Re-order level of O
(i) Minimum stock level of M
The following additional data is given:

Particulars
Re-order quantity Delivery(in weeks)
Maximum
(in kg.) Minimum Average
2 3 4
M 20,000
4 5 6
N 15,000
3 4 5
O 20,000
Answer (i)3,000 kgs.; (i) 15,400 kgs; (iii)15,000 kgs.
Question :31
From the details given below, calculate:
level (iv) Danger level
(0) Re-ordering level (ii) Minimum level (ii) Maximum
basis of following information:
Re-ordering quantity is to be calculated on the
R 20. Details of lead time:
Cost of placing a purchase order 10 days, Maximum 15 days
No. of units to be purchased during the year-5,000 Average
Purchase price per unit inclusive of transportation
Minimum- 6 days, For emergency purchase-4 days
Rate ofconsumption Average 15 units per day
cost 50.
Annual cost of storage per unit 5 Maximum-20 units perday
consumption rate 10 units per day)
Answer: 300 units, (0) 440 units (Minimum
(ii) 150 units,(iv) 60 units
Question:32
Medical Aids Co. manufactures a special product "AID". The following particulars were collected for

the year 2015: -

Monthly demand of AlD 1,000 units Minimum usage -25 units perweek
Maximum usage 75 units per week
Cost of placing an order- 100 4 to 6 weeks
Annual carrying cost per unit -R15 Re-order period-
Normal usage -50 units per week
Computefrom the above: (a) Re-order Quantity (b) Re-order Level (c) Minimum Level (d) Maximum
Level (e) Average Stock Level
Answer (a) 186 units,(6)450units (c) 200 units; (d)536 units(e)368 units
Question:33 May 2002, CA
M/s Tubes Ltd. arethe manufacturers of picture tubes for T.V. The following are their details during 2011
Average monthly market demand-2,000 tubes Normal usage -100 tubes per week
Ordering cOst-100 per order Minimum usage -50 tubes per week
Inventory carrying cost 20% per annum Maximum usage -200 tubes per week
Cost of thetube -500 per tube |Lead time tosupply -6 to 8 weeks
Compute:(i) Economic Order Quantity (i) Maximum stock level
(ii) Minimum stock level (iv) RE-order level.
Answer ()102tubes(i)1,402tubes(i) 900tubes(iv) 1,600 tubes
Question:34
If the minimum stock level and average stock level of a raw material are 4,000 and 9,000 units
respectively, find out its re-order quantity.
Answer 10,000 units
Question:35
A company provides following information in respect of a material:
1. Supply Period: 5 to 15 days
2. Rate of consumption: Average 15, Maximum 20 units per day, Yearly 5,000 units.
3. Ordering Cost is 20 per order: (i) Purchase price is { 50 per unit,
-

(ii) Storage Cost is 10% of purchase price.


Compute:- (1) Re-orderlevel (2)Minimum level (3) Maximum level
Answer (i) 300 units (i) 150 units (ii) 450 units
Question :36
About 50 items are required every day for a machine.
Afixed cost of 50 per order is incurred for
placing an order. The inventory carrying cost per item amounts to 0.02 per day. The lead
period is 32
days. Compute:(i) Economic Order Quantity(ii) Re-order level.
Answer (i) 500 units (ii)1600 units
Question:37
In a company weekly minimum and maximum consumption of material A are 25 and 75 units respectively.
The re-order quantity as fixed by the company is 300 units. The material is received within 4 to 6 weeks
from issue of supply order. Calculate minimum level and maximum level of material A
Answer 200 units and 650 units
Question:38
Determine Maximum Stock and Buffer Stock to keep stock at a reasonable level while providing a good
service where:
Particulars
Maximum Average Minimum
Daily Consumption 75 units 50 units 25 units
Delivery Period 5 days 2 days 1 day
ldeal Order Size = 125
Units
Re-order Level 375 units.
Answer 475 units and 275 units
Question : 39
In manufacturing a product a producer uses three raw materials X, Y and Z. The relevant information
relatingto thethree materials is as follows:
Raw Material X Z
Usage per unit of product (kgs.) 8 5 10
Re-order quantity (kgs.) 10,000 6,000 12,000
Price per kg. () 4 3 7
Delivery period (weeks) 1 to 5 3 to 5 2 to 4
Re-order level (kgs.) 7,000 5,000
Minimum level (kgs.) 3,000
Weekly production varies from 200 to 250 units. Determine the quantities ofthe following:
(a) Minimumstock ofX,(b) Maximumstock ofY, (c)Re-orderlevel of , and (d) Average stock of X.
Answer(a) 1,600 kgs. (b)8,000 kes. (c) 10,000 kgs.(d) 8,500 kgs.
Question: 40
Calculate EOQ, a minimum stock or safety stock, re-order level and maximum stock with the help of
thefollowing data supplied by aproducerfor aparticular material:
Annual consumption for material-4,000 units Average daily usage - 12 units

Cost of placing an order - 200 Maximum daily usage - 16 units

Per unit cost of material - 60 Maximum lead time - 10 days

Annual rate ofinterest 10% Minimum lead time - 6 days

Rent, insurance and storage cost - 4 per unit

Answer 400units,64 units, 160units and 512 units


Question:41
A company uses annually 48,000 units of raw material costing 1.20 per unit. Placing each order costs
45 and inventory carrying costs are 15% per year of the average inventory values:
(i) Find the E.O.Q.
(i) Suppose that the company follows the E.0.Q. policy and its operates for 300 days a year, that the
procurementtimes 12 operating days and the safety stock is 500 units, find:
(a) Re-order level (b) The maximum level (c) The minimum level (d) The average inventory

Answer() 4,899 units (i) (a) 2420units(b) 5,399 units(c)500 units (d)2,950 units

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