I ET-581(B)

B.Tech. Civil (Construction Management) Term-End Examination December, 2009

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ET-581(B) : INVENTORY AND STORES MANAGEMENT Maximum Marks : 70

Time : 3 hours

Note : Attempt any five questions. All questions carry equal marks. Use of calculator is permitted.

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(a) What will be your planning for storage building and for smooth store operations for a large construction company ? Also explain in brief the role of Bin Card in the store. (b) The demand rate for an item in a company is 18000 units per year. The company can produce at the rate of 3000 per month. The set up cost is Rs. 500 per set up and the holding cost is Rs. 0.15 per unit per month. Calculate. Optimum manufacturing quantity The maximum inventory Time between production runs The number of production runs per year (v) The time of manufacture

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P.T.O.

(a) What are stock out costs and capacity associated costs ? What is their relationship to inventories ?

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(b) XYZ a manufacturing company having a following data :

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Annual demand = 1200 units Number of days per year for production = 240 Production rate = 200 units/ day Setup cost = Rs. 8000 Inventory carrying cost = Rs. 600/unit/year. What should be the production lot size ? (a) There is a current trend to reduce inventories. How is this being accomplished and what is the impact of lower inventories on the firm, its suppliers, and its customers? (b) A company wishes to establish an EOQ for an item for which the annual demand is Rs. 800,000, the ordering cost is Rs. 32, and the cost of carrying inventory is 20%. Calculate the following : The EOQ in Rupees Number of orders per year. Cost of ordering, cost of carrying inventory, and total cost ET-581(B)

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(a) Why is it desirable to classify items into groups, as the ABC classification scheme does ? (b) A company is presently ordering on the basis of an EOQ. The demand is 10,000 units a year, unit cost is Rs. 100, ordering cost is Rs. 300, and the cost of carrying inventory is 20%. The supplier offers a discount of 3% on order of 1000 units or more. What will be the saving (or loss) of accepting the discount ?

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(a) Briefly identify the purchasing department responsibilities. What are some of the key factors to consider in the selection of suppliers ? (b) For a particular stock keeping unit (SKU), the lead time is four weeks, the average demand is 125 units per week, and safety stock is 100 units. What is the average inventory if 1600 units are ordered at one time ? What is the order point ?

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(a) Write down the precautions to be taken for the storage of explosions and storage of chemicals. (b) When do you apply the double sampling method in an organisation ? Justify your answer with suitable examples.

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7.

Write short notes on any four of the following : 4x31/2=14 Just in - time Stock verification Store layout Bin Card (e) FIFO system -o0o-

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