A firm is faced with the attractive situation in which it canobtain immediate delivery of an item it stocks for retailsale. The firm has therefore not bothered to order the item in any systematic way. However, recently profits have beensqueezed due to increasing competitive pressures, and thefirm has retained a management consultant to study itsinventory management. The consultant has determined thatthe various costs associated with making an order for theitem stocked are approximately $70 per order. She has alsodetermined that the costs of carrying the item in inventoryamount to approximately $27 per unit per year (primarilydirect storage costs and forgone profit on investment ininventory). Demand for the item is reasonably constantover time, and the forecast is for 16,500 units per year.When an order is placed for the item, the entire order isimmediately delivered to the firm by the supplier. The firm operates 6 days a week plus a few Sundays, or approxi-mately 320 days per year. Determine the following: a. Optimal order quantity per orderb. Total annual inventory costsc. Optimal number of orders to place per yeard. Number of operating days between orders, based on theoptimal ordering
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.
A firm is faced with the attractive situation in which it can
obtain immediate delivery of an item it stocks for retail
sale. The firm has therefore not bothered to order the item
in any systematic way. However, recently profits have been
squeezed due to increasing competitive pressures, and the
firm has retained a management consultant to study its
inventory management. The consultant has determined that
the various costs associated with making an order for the
item stocked are approximately $70 per order. She has also
determined that the costs of carrying the item in inventory
amount to approximately $27 per unit per year (primarily
direct storage costs and forgone profit on investment in
inventory). Demand for the item is reasonably constant
over time, and the
When an order is placed for the item, the entire order is
immediately delivered to the firm by the supplier. The firm
operates 6 days a week plus a few Sundays, or approxi-
mately 320 days per year. Determine the following:
a. Optimal order quantity per order
b. Total annual inventory costs
c. Optimal number of orders to place per year
d. Number of operating days between orders, based on the
optimal ordering
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