Compute re-order level
Corporate Finance
Q1. Compute re-order level, minimum level, maximum level and average stock level for component A and B of company XYZ Ltd.
Normal usage- 90 units per week
Minimum usage- 50 units per week
Maximum usage- 140 per week
Re-order period- Component A:2 to 6 weeks; Component B: 4 to 8 weeks
Re-order quantity- Component A: 600 units; Component B: 800 units
Q2. Sales of 4,00,000 units at Rs. 5 per unit, variable cost Re.0.60 per unit, fixed cost Rs.2,00,000, interest charges Rs. 3,500. Compute degree of operating leverage, financial leverage, and combined leverage. Comment on the values of each leverage.
Compute re-order level
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Compute re-order level
