Mr. Waleed is running furniture manufacturing business. He required raw material on regular basis. He uses the best suitable methods of purchasing of material. He tried to used preparation of inventor budgets, perpetual inventory system, just-in- time, ABC analysis but none of the above suited to his business. Once he had to stop his production, when he was using Just-In- Time purchasing method. One day Mr. Waleed explain all the cost details to his cost accountant as follows: The normal usage was 50 Units. In case of low demand his minimum usage was only 25 units. During high demand time Mr. Waleed used to purchase 75 units. Mainly he required two types of raw material like Material 1 and Material 2, His reorder quantity for Martial 1 was 300 Units & For Material 2 was 500 Units. His cost accountant told him that they need 40 Units as average. Mr. Waleed was very good at planning, but in case of emergency he used to wait 1 day for material 1 and 2 days for material 2 to get material. Likewise, Mr. Waleed instructed to store keeper that they should place reorder like 4 to 6 days & 2 to 4 days for material 1 and 2 respectively.
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Mr. Waleed is running furniture manufacturing business. He required raw material on regular basis.
He uses the best suitable methods of purchasing of material.
He tried to used preparation of inventor budgets, perpetual inventory system, just-in- time, ABC analysis but none of the above suited to his business.
Once he had to stop his production, when he was using Just-In- Time purchasing method. One day Mr.
Waleed explain all the cost details to his cost accountant as follows: The normal usage was 50 Units.
In case of low demand his minimum usage was only 25 units. During high demand time Mr. Waleed used to purchase 75 units.
Mainly he required two types of raw material like Material 1 and Material 2, His reorder quantity for Martial 1 was 300 Units & For Material 2 was 500 Units.
His cost accountant told him that they need 40 Units as average. Mr. Waleed was very good at planning, but in case of emergency he used to wait 1 day for material 1 and 2 days for material 2 to get material.
Likewise, Mr. Waleed instructed to store keeper that they should place reorder like 4 to 6 days & 2 to 4 days for material 1 and 2 respectively.
State the total of average and normal usage of raw material?
a.
65 Units
b.
75 Units
c.
100 Units
d.
90 Units
Find the total of re-order quantity of both the material:
a.
300 Units
b.
200 Units
c.
500 Units
d.
800 Units
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