Re: ::::IIVU ASKARII:::: FIN622

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Question No: 35 ( Marks: 1 ) - Please choose one
Which of the following is equal to Stock out cost?
► Carrying cost Safety stock
► Holding cost Carrying cost
► Reordering cost Safety stock
► Carrying cost Reordering cost

STOCK OUT COST =AC\Q*S*Sc*Ps

AC=ANNUAL CONSUMPTION

Q=ORDER QUANTITY

S=STOCK OUT IN UNITS

Sc=STOCK OUT UNIT COST

Ps= ACCEPTED PROBABILITY OF STOCK OUT

=2000,00\5000*3000*7*0.05

=42000

SAFETY STOCK LEVEL

LET X = SAFETY STOCK THEN

STOCK OUT COST = CARRYING COST * SAFETY STOCK

42000 = 2 * X

X=42000/2=21000 UNITS

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