ACCA F2 Inventory Control (part c) – Economic Batch Quantity
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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 than 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
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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…
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