MGMT714 Assignment 1 Solution and Discussion
SEMESTER FALL 2019
ADVANCED SUPPLY CHAIN MANAGEMENT (MGMT714) ASSIGNMENT NO.01
Total Marks: 10
Due Date: 28th January, 2020
“Let’s Build” a construction company has been assigned a project of constructing a multistory
building in the center of city. At the moment, the company is looking for vendors who could supply electric switches for the building.
“Smart Switches”, a newly established firm, has offered its products to the company. To secure the business, “Smart Switches” is offering quantity discounts to the company as given in the following table:
No. of Switches
up to 1999 2000 to 4999 5000 to 9999 10000 or more
Price per Switch
Rs.1.25 Rs.1.20 Rs.1.18 Rs.1.15
The demand for the switches is 60 units daily and the company operates 300 days a year. It costs Rs.32 to place an order of switches and the holding cost per switch is 20% per annum of the price.
a) Being procurement manager of the construction company, it is your task to find an optimal
quantity based on the Economic Order Quantity Model.
b) Calculate the number of orders that the firm needs to place for this building.
Show the necessary calculations in solution.
No theoretical definitions and explanations are required.
Watch video lectures and consult book/notes to complete the assignment
(8 marks) (2 marks)
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