NextQ72

'Zen MotoCorp', a leading motorcycle manufacturer, requires batteries for its production units. The procurement lead time is two months and the demand during this period is expected to be 2000 batteries per month, making its reorder point at 4000 batteries. Fresh supplies should arrive just as the stock reaches zero. However, due to variability in the rate of demand (or consumption) as well as in the supply or manufacturing lead time etc., it may reach a zero stock status before the supply arrives. To cater to such variability, it decides to add 500 batteries to its reorder level. The reorder level would now be 4500 batteries. The addition of 500 batteries in the reorder point is known as :

Inventory Control and EOQStudy Simplify SpecialPYQ1MCQ
Question 71

While calculating the Economic Order Quantity, it is necessary that a company should know how much the 'Inventory Carrying Cost' is and what does it include. From the following, identify the item which is not included in 'Inventory Carrying Cost' :

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