A manufacturing company purchase 9000 parts of a machine


A manufacturing company purchase 9000 parts of a machine for its annual requirements ordering for month usage at a time, each part costs Rs. 20. The ordering cost per order is Rs.15 and carrying charges are 15% of the average inventory per year. You have been assigned to suggest a more economical purchase policy for the company. What advice you offer and how much would it save the company per year?

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Operation Management: A manufacturing company purchase 9000 parts of a machine
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