The amount of time elapsed from the moment an inventory replenishment order is placed and the moment the supplier delivers the goods is
lead time
Based on the standard definitions used in operations and supply chain management, the time elapsed from placing an inventory replenishment order to receiving the goods from the supplier is known as lead time. Lead time is a crucial factor in determining various inventory parameters, such as the reorder point and safety stock levels.
Important Questions from Inventory Control
- AB Ltd. manufactures filing cabinets. For the current year, the company expects to sell 4,000 cabinets involving a loss of Rs. 2,00,000. Only 40 percent of the plant's normal capacity is being utilised during the current year. The fixed costs for the year are Rs. 10,00,000 and fully variable costs are 60 percent of the sales value. What is the break-even point in terms of sales value?
Margin of safety in break-even analysis is
A manufacturing company has an expected usage of 50,000 units of a certain product during next year. The cost of processing an order is Rs. 20 and the carrying cost per unit is Rs. 0.50 for one year. What will be the Economic Ordering Quantity ?
For an organization producing a product, the fixed cost per month is Rs. 12000. The variable cost per product is Rs. 24. The unit selling price of the product is Rs. 48. To achieve break-even, the minimum production per month shall be
Break-even point shows that
