For a reordering system based on inventory level, calculate buffer stock. What should be reorder level at this buffer stock? What would be carrying costs for a year?

The information provided for an item is as follows: Annual demand = 12000 units Ordering cost = Rs 60 per order Annual carrying cost = 10 % of the purchase price. Unit cost of item = Rs 10 and Lead-time = 10 days. There are 300 working days a year. Determine EOQ and a number of orders per year. In past two years, use rate has gone as high as 50 units per day. For a reordering system based on inventory level, calculate buffer stock. What should be reorder level at this buffer stock? What would be carrying costs for a year? Uploaded with Ima...

hat do you understand by Automated Storage and Retrieval? For what kinds of goods and in which companies in India do you think such systems would be appropriate?

What do you understand by Automated Storage and Retrieval? For what kinds of goods and in which companies in India do you think such systems would be appropriate? Answer. Automated storage and retrieval systems (ASRS) are systems for receiving orders for materials from wherever in operations, collecting the materials from locations within a warehouse, and delivering the materials to workstations in operations. There are three major elements of ASRS: 1. Computers and communication systems: These systems are used for placing orders for materials,...

How much per bearing can RBI afford to spend on inspection costs before it begins to lose money on inspection?

The marketing manager of Roller Bearings International (RBI) estimates that “defective bearings that get into the hands of industrial users cost RBI an average of Rs. 200 each” in replacement costs and lost business. The production manager counters that “the bearings are only about 2 per cent defective now, and the best a sampling plan could do would be to reduce that to 1 per cent defective – but not much better (unless we go to 100 percent inspection).” Should RBI adopt a sampling plan if it costs? i) Rs. 100 per bearing? ii) Rs. 250 per bearing? iii)...

What do you mean by an integral approach to Materials Management? Explain.

What do you mean by an integral approach to Materials Management? Explain. Answer. Materials management is a coordination function responsible for planning and controlling materials flow. Its objectives are: • Maximize the use of the firm’s resources • Provide the required level of customer service An industrial unit should have a centralized authority vested with the responsibility of planning, procuring, preserving, handling, usage and other related aspects. Such a centralized authority wherein, all related activities of materials are combined...

Supplier selection and supplier relations are considered important for the purchasing department. Should the quality assurance department ever become involved in these issues? Why or why not?

Supplier selection and supplier relations are considered important for the purchasing department. Should the quality assurance department ever become involved in these issues? Why or why not? Answer. Supplier selection criteria for a particular product or service category should be defined by a “cross-functional” team of representatives from different sectors of your organization. In a manufacturing company, for example, members of the team typically would include representatives from purchasing, quality, engineering and production. Team members...

“You don’t inspect quality into a product: You have to build it in.” Discuss the implications of this statement.

“You don’t inspect quality into a product: You have to build it in.” Discuss the implications of this statement. Answer. The saying, "You don't inspect quality into a product, you have to build it in!" emphasizes the shift in emphasis from inspection to prevention Investing in prevention can be economic. A typical factory invests 20 to 25 percent of its operating budget in finding and fixing mistakes. One fourth of all workers fix things that are not done right. These are appraisal and internal failure cost. On the other hand, if quality standards...

The cost of holding a bearing in stock for a year is Rs. 2 and the set-up cost of a production run is Rs. 180. How frequently should production run be made?

A contractor has to supply 10,000 bearings per day to an automobile manufacturer. When he started production runs, he can produce 25,000 bearings per day. The cost of holding a bearing in stock for a year is Rs. 2 and the set-up cost of a production run is Rs. 180. How frequently should production run be made? Uploaded with ImageShack...