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The Economic Batch Quantity Example 4 and 5
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i am writing the june 2013 exams and i have not studied at all. pls can anyone advise on the best way to study and pass this f2 and f3 with such short notice. i have a very tight schedule and i dont have any accounting background and i have tried viewing the lectures but it does not open . pls help….
thanks
Thank you Opentuition, special thanks to johnmoffat. You are a Great lecturer May God Bless you.
Thank you
You are Welcome.
Dear Sir
I have been through the luctures on inventory and you explained evrything so simple.However I am a bit confused with ordering cost.Is it always fixed(for every batch we used the same ordering cost).If so how it applies in real life circumstances?
In F2 it is always a fixed amount per order.
It is not realistic in real life because since the most likely order cost relates to delivery then the delivery charge is likely to change depending on the quantity ordered.
(In practice, if the delivery cost was something like “$0.10 per unit + a standing charge of $10 per order” then in fact we could deal with it. In total over the year the variable cost would be fixed (number of units ordered over the year x $0.10) and could therefore be ignored in the formula. All we would put in the formula would be the $10 because the total over the year would vary with the number of orders. However, for F2, there is no need to worry about that
)
Re-order level and ‘safety’ inventories??? please…
What about them?
If you look at the revision lecture on inventory control you will find an explanation of them there.
Hello John
Wrt to EBQ can we use this for just in time delivery sort of situation?
Thanks
No – it is different that JIT.
There are two main reasons. One is that EBQ assumes that we order in fixed quantities at fixed intervals, whereas JIT assumes that we order as needed. Second it that the main focus of JIT is on quality and the costs involved with quality are impossible to quantify.
These examples are not included in he corse notes that i have. Where cani find them
Try looking on pages 27 and 28 of our Course Notes! (I assume that you have downloaded our course notes?)
Sir, Could u please tell how the average inventory ebq/2(1-d/r) derived. where should i refer?
If you are happy with differentiation then it is fairly easy to derive the formula for the EBQ and for the average inventory.
However deriving it is excluded from the syllabus (and will take too long to type out on here).
The derivation might be in some of the approved study texts (although probably not because it is not in the syllabus).
Sir could u please suggest me a good book for Financial management? I luv this subject. and nw after having viewed ur lectures im evem more impressed.
Thanks in advance
wrt EOQ formula even with out differenciation i could derive.
@ EOQ HOLDING COST = ORDERING COST
AVG INVENTORY*HC PER UNIT PER ANNUM = NO.OF ORDERS * OC
EOQ/2 * HC= DD/EOQ *OC
EOQ* EOQ=2 *DD*OC/HC
EOQ=ROOT OF 2*DD*OC/HC
LYK THIS CANT WE DERIVE EBQ. FOR ME THE DOUBT IS WAT SHOULD BE AVD INVENTORY IN EBQ SCENARIO?
This is not a derivation of the equation – it is assuming that total holding cost will equal total order cost at the optimum. Although this is the case, you have not proved it!
Thanks again. You make it seems so much easier.
These examples are not in the study notes, is that correct or have they been missed out?
i love OT but i don’t think i am studying from the right text book.Can anyone tell me the name of the textbook? mine is from the BPP Learning Media
@accakeisha, Hi
It’s not a text book – it’s the down-loadable course notes which you’ll find on this site
i really hate it when i realize why i didnt start studying before from opentuition and would have saved time and definitely pass my exams too. Really helpful lectures.
Love opentuition
Saify
blessings!!!
Admin,is it too late to start study for the june sitting for the F2/FMA exam?
@anomith, i m STArting frm today ??
@anomith, You may take an exam of F2 in CBE center any time around year.
thanks OT…
i wonder why i didnt start immediately…
the lectures are soooooo goood.. and easy to understand.
thx sooo much open t.
thank u very much
This has been good easy to understand nice thank you
as previously stated the lectures are really helpful and understandable
Great lecture. Many thanks
thank you so very much
was really helpful. clear and concise
very good and easy to understand
this is great