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A D - Loving Life (Querist)
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02 December 2008 ur factory buys & uses a component for production at rs. 10 per piece. Annual requirement is 2000 mos.
Carrying cost of inventory is 10percent p. a. & ordering cost is rs. 40 per order. Purchase manager argues that as ordering cost is very high, its advantage to place a single order for entire annual requirement. he also says that if we order 2000 at a time we can get a 3 percent discount from the supplier. Evaluate this proposal & make ur recoomendation?

Taranjit Singh

Taranjit Singh (Expert)
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25 September 2009 If this query is still pending please post it again dear by updating.......Best wishes

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