vu mcm411 Mid Term Subjective Solved Past Paper No.2

vu mcm411 Introduction to Broadcasting Solved Past Papers

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Question 8: If we increase the inventory, then what would be the proportionate effect on the followings. Give proper reason in each case.
  1. (i) Shortage Cost.
  2. (ii) Ordering or Setup Cost per unit time.
  3. (iii) Holding Cost.
Answer:

Shortage Cost

When we increse the inventory the shortage cost will decrease.

If we have much inventory then we dont need to giv cost for overtim requirements due to shortage nd also will not bear clerical nd adminitrator expenses.

Ordering or Setup Cost per unit time

When we incraese the inventory the ordering cost C2 will also b increased. If the items r inventory incrased then tsting nd training costs will also increased.

Holding Cost

This will increase because with high inventory we need to giev tex and insurence also. we have to mantian the inventory record too.

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