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safety stockwhat must be the level of safety stock in a simple condition where merely the usage rate is variable and the maximum usage rate can be
the standard eoq model supposes that materials can be procured immediately and thus implies that the firm may place an order for replenishment as the
in this method the minimum and maximum level for all items of inventory are fixed these levels function as an origin for initiating action so that
for getting the eoq formula we shall use the subsequent symbolsu annual usagedemandq quantity orderedf cost per orderc per cent carrying
the basic eoq model is depends on the subsequent assumption1 the forecast usage or demand for a specified period usually one year is identified2 the
under this system all stock levels are reviewed after fixed time duration depending upon the significance of the item imported items may need a
in this type of system store balances are recorded and computed after all receipt and issue the main focus of this system is to make obtainable
inventory control ratiosfor reasons of monitoring the effectiveness of inventory management this is useful to look at the subsequent ratios and
inventory control implies a planned approach of ascertaining while to buy how much to buy and how much to stock hence costs including storing and
the twin objectives of inventory management are financial and operational the operational objective implies that the materials and spares would be
1 inventory of raw material are held to make sure that the production process is not disrupted because of shortage of raw material the amount of raw
the dictionary explains the word inventory as stock of goods although inventory implies that such type of assets that will be disposed of in future
objectives of inventory managementafter going through this section you will be capable to highlight the requirement for and nature of inventory
most firms build and keep inventories in the course of doing business manufacturing firms hold raw material finished goods and spares and work in
trade credit creates accounts or debtors receivables trade credit is utilized as a marketing tool to expand competitive advantage over trade rivals a
individuals commonly prefer possession of cash immediately or in the present moment quite than the same amount at any time in the future such
pvainfin a1 k-1 a1 k-2 a1 kinfin 1 a 1 kinfinmultiplying both the sides of eq a7 by 1k providespvainfin 1 k a1 k a 1 k-1 a 1
derivation of formulasi future value of an annuityfuture value of an annuity isfvan a1 kn -1 a 1 kn - 2 a 1 k a
equation illustrates the relationship in between pvan a k and n so manipulating this a bitwe find thata pvan k 1 kn1 kn - 1k 1 kn1 kn - 1 in
in common terms the present value of a regular annuity may be shown as given belowpvnn a1 k a1 k2 a1 kn a 11 k 11 k2 11 kn a 1 kn- 1k 1
let us assume you expect to obtain rs2000 yearly for the next three years the receipt of rs2000 is evenly divided one part that is rs1000 is obtained
how much must you save annually in order to accumulate rs 20 00000 by the ending of 10 years whether the saving earns an interest of
assume that you are interested in understanding how much must be saved regularly over a period of time in order that at the ending of the period you
assume you are receiving an amount of rs5000 twice in a year for subsequent five years one time at the starting of the year and another amount of rs
compute the present value of rs 1000 receivable 6 years thus if the discount rate is 10 percentsolution the present value is computed as follows pvkn