Purchasing and Financing 2024
Purchasing- and Financial Management For 2nd year CATS learners. Aligned to the outcomes of the German accredited certification: “Industrie Kaufmann/frau”.
Purchasing- and Financial Management
For 2nd year CATS learners.
Aligned to the outcomes of the German accredited certification: “Industrie Kaufmann/frau”.
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CLASS ASSIGNMENT:<br />
A manufacturer requires 1 800 castings per annum with a purchasing price of R100-00.<br />
The storage cost per unit is R10-00 per annum <strong>and</strong> the safety stock is 10 units.<br />
Calculate the stock indicators as explained in the table above if; Case 1: It is ordered twice<br />
per year <strong>and</strong> Case 2: It is ordered 12 times per year.<br />
Indicator Case 1 Case 2<br />
Order Quantity<br />
Average Stock<br />
Turnover<br />
Average Storage<br />
Time<br />
Average Storage<br />
Cost<br />
Average Capital<br />
Tied Up<br />
Storage Interest<br />
Rate<br />
9. MINIMISING INVENTORY COSTS<br />
Students can calculate the Optimal Order Size by using a table or by applying a formula.<br />
The core of the inventory problem is this. As the order size increases the number of<br />
orders fall but the average inventory rises. So, costs that are related to the number of<br />
orders will decline but costs related to keeping the stock will rise.<br />
It is worth increasing order size if the decline in order cost outweighs the increase in<br />
carrying cost. The optimal order size is the point at which these two effects exactly offset<br />
each other.<br />
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