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help me with these listed terms below..
1.goods received note and
delivery note2,Does GRN is given by customer and delivery note by supplier??
3.is materials returned note and goods returned note similar?
4.what does capital tied up means?
5.the following documents are used in accounting for raw materials. which of the documents can be used to update stores ledger cards for inventory??
GRN
Materials returned note
materials requisition note
delivery noteGRN is prepared by the receiver of the goods.
Delivery note is prepared by the sender of the goods.Materials returned note and goods returned note mean the same thing.
Capital tied up is cash being invested in an asset.
5. the first two
what is meant by buffer inevntory?? buffer inventory is 700 components. annual holding cost per order is 3. EOQ is 1500 components. materials usage is 28000 components.what is the total annual cost of holding inventory of components?
Buffer inventory is another word for safety inventory. It means we hold extra inventory (over what we actually need) just to be safe.
In your question, the average inventory is 1500/2 (as usual with an EOQ of 1500) + 700 (the extra that we are keeping all year) = 1450 units.
To get the total annual cost multiply this by $3
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