1: Average monthly consumption
Average monthly consumption = Total consumption for the past six months / 6
Average monthly consumption = 162,000 / 6 = 27,000 tablets
2: Safety stock
Safety stock = Average monthly consumption * Lead time
Safety stock = 27,000 * 90 = 2,430 tablets
3: Quantity to order (packs)
Quantity to order = Safety stock / pack size
Quantity to order = 2,430 / 1,000 = 2.43 packs
Since you cannot order a fraction of a pack, you should order 3 packs.
4: Total costs
Total costs = Quantity to order * pack price
Total costs = 3 * 27.90 = 83.70 USD
Therefore, you should order 3 packs of chlorpropamide 250 mg, with a total cost of 83.70 USD.
There was an ending balance of 169,000 tablets of chlorpropamide 250 mg. The lead time is ninety days, the total consumption for the past six months was 162,000 tablets, and the procurement period is six months. No stock out period. Based on the information given above, calculate the following
1: Average monthly consumption.
2: Safety stock.
3: Quantity to order (packs).
4: Total costs.
(N.B: pack size= 1,000; use adjustment= probable pack price= 27.90 USD)
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