Worksheet- Material

Stock Level

Problem-1

Problem-2
Two components X and Y are used as follows :
Normal usage 6,000 units per week each
Maximum usage 9,000 units per week each
Minimum usage 3,000 units per week each
Re order quantity X–48,000 units; Y-72,000 units
Re order period X- 4 to 6 weeks; Y – 2 to 4 weeks
Calculate the various stock levels for both materials
Problem-3
From the following information you are required to calculate for each product :
1) Re order level
2) Maximum stock
3) Minimum Stock
4) Average Stock
Material X Material Y
Average consumption per week 500 500
Minimum requirement per week 250 250
Maximum usage per week 750 750
EOQ 3,000 5,000
Replacement time 4 to 6 weeks 2 to 4 weeks
 Economic Order Quantity (EOQ) or Re-Order Quantity

Problem-4
Problem-5

Problem-5

Ans. 800 tonne (When total cost Rs. 23,694)

Problem-6

Problem-7
Problem-8

(Note : Do not round off partial orders)

Problem-9
The monthly demand of a Product is 5000 units. The company requires 50 kg of raw material for
each unit of the product. The supplier of the said raw material, M/s Shah and Company, sells the
said raw material at a cost of Rs. 250 per unit. The ordering cost paid per order by the company is
Rs. 400 and the storage cost per unit per annum is Rs. 24. You are required to calculate the
Economic Order Quantity and number of orders during the year.

Problem-10
A company manufactures 1500 units of product EXE per month at a cost of Rs. 150 per unit. It
requires ten units of raw material to manufacture one unit of EXE. The raw material is supplied to
the company at Rs. 12 per unit. The supplier is willing to give a discount of Rs.2 if the company
commits to buy at least 1,00,000 units per annum. The cost of procurement for the company is Rs.
50 for every 2 orders. The cost of storage is 10% p.a.
You are required to find the
a) Optimum quantity that the company should order to minimize cost.
b) Total Annual Cost of inventories.

Problem-11
The following is the relevant data for one of the components bought by Mazda Limited :
Ordering Cost Rs. 50
Holding Cost 40% p.a.
Cost per component Rs. 100
Annual Demand 1,000 units
The purchase manager placed 5 orders of equal quantity in order to avail the discount of 5% on
the cost of the components. Work out the gain or loss to the organisation due to his ordering policy
for the component.
 Store Ledger of material pricing
Problem-12

Problem-13

Problem-14
Problem-15

Problem-16

Problem-17
Problem-18
The following were the receipts and issues of material ZED during March 2005.
March Particulars
1 Opening balance – 1100 units Rs. 60 per unit
3 Issue - 140 units
4 Issue - 250 units
8 Issue – 210 units
13 Received from vendor 400 units at Rs. 59 per unit
14 Refund of surplus from a work order 30 units at Rs. 58 p.u.
16 Issue 350 units
20 Received from vendor 480 units at Rs. 62 per unit
24 Issue 608 units
25 Received from vendor 640 units at Rs. 60 per unit
26 Issue 524 units
28 Refund of surplus from a work order 24 units (issued on March 3)
31 Received from vendor 150 units at Rs. 64 per unit
From the above, write the Stores Ledger Account on basis of
a) FIFO
b) weighted Average.