Professional Documents
Culture Documents
By:
Achal Singhal
(052)
Introduction
The
Material Control
Methods of stock
valuation
First-in-first-out(FIFO)
Last-in-first-out(LIFO)
Weight average cost (WAVCO)
Specific identification/unit cost
method
First-in-first-out
This
Last-in-first-out (LIFO)
This
Specific identification/unit
cost method
This
Example
The
Solution
O=
EOQ = 2 O Q
C
EOQ = 2 * 5000 *10
0.5*10%
= 1414 units
Level setting
It
Re-order level
The
Maximum level
The
Minimum level/Safety
stock
EXAMPLE
Average usage
Minimum usage
Maximum usage
Order Quantity
9000 units
Re-order level
= (Maximum consumption * Maximum re-order pe
= 1350 units *4
= 5400 units
Minimum level
= Re-order level Average usage in average lead
= 5400 units (800 units *4)
= 2200 units
Maximum level
= re-order level + EOQ Minimum anticipated usa
in Minimum lead
= 5400 units +9000 units (800 units *4)
= 11200 units
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