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Management In A Manufacturing Company
CHAPTER FOUR -- [Total Page(s) 14]
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From the calculation total above, inventory cost of materials for concentrate using EOQ model is 1755155, Cost saving (CV) = 12333216-1755155 = 521939
This implies that the company could be saving 521939 per annum on cost of concentrate if it adopts the economic quantity –EOQ model
The cost saving effect of economic order quantity-EOQ model On inventory of raw material for Sugar
Minimum stock level= 6,537,800-350,500÷2 = 3093650
A=6,537800kg Q=350500kg Co= 8120.00 C=80 H =0-12
T/C =( 6,537800)/350500 (8120) + (3093650 +350500) (0.12) (80)
T/C = 151460.6 + 3444150 (0.12)(80)
T/C 2332153006
From the calculation 4.82 total inventory cost of raw materials for sugar using EOQ model is 31423880 cost saving (CV) 33215300.6-31423880 = 1791420.6
This shows that the company could be saving 1791420.6 per annum on cost sugar if it adopts the economic quantity-EOQ model
The cost saving effect of economic order quantity-EOQ model on inventory of raw material for hydrated lime
Minimum stock Level= 28100-2500÷2 = 12800kg
A=28100kg Q=2500kg Co=4500 C=150 H=0-5
T/C = 28100/2500 + (4500) + (12800+2500) (0.5) (150)
T/C = 50580 + 11475300 = T/C 1198080
This implies from the calculation 4.83 of total inventory cost of raw materials for hydrated lime using EOQ model 10822842
Cost saving (CV) = 1198080-1092284=115796
This indicates that the company could save 115796 per annum on cost of hydrated lime if it adopts the economic quantity-EOQ model.
4.10.4 The cost saving effect of economic order quantity-EOQ model
On inventory of raw material for Acciducant
Minimum stock Level = 1646004700 15990
A=164600kg Q=4700kg Co=3600 C=85 Q=O.14
T/C = (16400 )/4700+ (3600) + (159900+4700) (0.14) (85)
T/C = 126076.5 + (164600) (0.14) = T/C 2084816.5
From the calculation 4.8.4 total inventoiy cost of raw materials for acciducant using EOQ model is 1070160.7
Cost saving (cv) = 2084816.5-1070160 = 1014655.8
This means that company could be saving 1014655.8 per annum on cost of concentrate if it adopts the economic quantity.EOQ model
Calculation of cost saving effect of economic order quantity-EOQ model on inventory of finished product.
The cost saving effect of adopting economic order quantity-EOQ model in the calculation of costs for the inventory of selected finished products can be ascertained using the following formular
Let cv = cost saving
The total inventory for production run model is given by total set up costs of total carring costs.
But TIC = AS/CD = Q/2P (P-D) CH⋯⋯ (4)
Where A = requirement of inventory per annum
Q = optional number of crate per production nm
P= Production rate of inventory D= Usuage rate of inventory per crate
C= cost value of inventory per crate
H=carrying cost as percentage of average
The cost saving effect of economic order quantity -EOQ model on inventory of raw material for orange drinks
A=2150,000kg Q=4620kg C=1000 D=2200 H=0.15 S=2260
T/C = A (S/Q) + (Q/2Q) (Q-D) (C) (H)
T/C=( 2150,000)/4620 (2260) +4620/2(4620) (4620-2200)(1000) (0.15)
T/C= 1051731.6+ 0.5 (2420) (1000)(0.15)= T/C = 1233231.3
CHAPTER FOUR -- [Total Page(s) 14]
Page 12 of 14
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ABSRACT - [ Total Page(s): 1 ]WILL COME HERE SOON ... Continue reading---
LIST OF TABLES - [ Total Page(s): 1 ]LIST OF TABLE AND FIGURESFigure: 3.2. Corporate organization structure Table: 4.2 Material purchase and inventory cost for the year 2009 Table: 4.6 Production schedule and finished products inventory cost for the year 2009 ... Continue reading---
TABLE OF CONTENTS - [ Total Page(s): 1 ]TABLE OF CONTENTTitle page Certification Dedication Acknowledgment Table of contents List of table CHAPTER ONE1.1 Background of the study 1.2 Statement of research 1.3 Research objectives 1.4 Research question 1.5 Justification of study 1.6 Scope of the study 1.7 Historical background of the case study 1.8 Definitions of terms CHAPTER TWO LITERATURE REVIEW2.1 Concept of material management ... Continue reading---
CHAPTER ONE - [ Total Page(s): 3 ]CHAPTER ONEINTRODUCTION1.1 Background to the StudyAs a manager in a manufacturing company. It a more necessary than ever to improve tire overall productivity of lire operation ‘while such improvement requires an integrated dint involving all functional areas of the facility specific actions are requited within each functional area one of the functional areas in a manufacturing operation that is critical in the overall productivity of the company is material management The material ma ... Continue reading---
CHAPTER TWO - [ Total Page(s): 6 ]Price nut Carter (2005) further stressed that the stock controls system is responsible for the correct establishment of stock levels for every item held in the store when these levels are being established certain basic operational factors have to be considered and then reflected in the final stock figure. These as follows:i. Storage capacity: This is the amount that can be held will be restricted by the actual physical capacity of the stores. Operation in sonar cases where a special store ... Continue reading---
CHAPTER THREE - [ Total Page(s): 3 ]CHAPTER THREERESEARCH METHODOLOGY3.1 IntroductionThis chapter makes an attempt to present the general procedure needed to carryout this study. It includes brief description of some key pots of this research such as the brief history of the company (Seven up Bottling Plc. Ilorin plant), population, sample, method of data collection and sampling techniques.3.2 Corporate Organization StructureF.C Financial controverE.S.M Engineering Service ManagerC.O.O Chief opera ... Continue reading---
CHAPTER FIVE - [ Total Page(s): 2 ]CHAPTER FIVE SUMMARY OF FINDINGS CONCLUSIONS AND RECOMMENDATIONS5. 1 Summary of Findings Material management has been defined as the total of all those tasks, function activities and routines which concerns the transfer of external materials and service into the organization and the administration of the same until they are consumed or used in the process of production operation or sales. After the analysis and interpretation in chapter four, evidence has s ... Continue reading---
REFRENCES - [ Total Page(s): 1 ]REFERENCESMenlizer, W Keebler (2001) Business journal logistics Page 1-26,Bailey, and Farmer (2006) Purchasing principle and management 9th EditionTrans-Altantic publication onlineTooley, D.F (2001) Production control system and record 2nd Edition: London Gower pressRogger (2004) Management 3 Edition London, M&E handbook series, pitman.Orleckey J. (2000) Material requirement planning New York Mc Graw4lill on lineLyson (2006) Purchasing and supply chain. 7th Edition prentice hall onlineLancastcr. ... Continue reading---
