Vikas Kumar Gupta (Student IPCC) (408 Points)
01 December 2008I am a PCC student from Chhatisgarh and I am doing total SELF-STUDY, Dear freinds and respected elders I need help from YOU!!!
I have subject problem in COST and topic is --
One of the Techniques of Inventory Control is-
Setting of Various Stock Levels . The formula for MAXIMUM LEVEL IS
RE-ORDER-LEVEL + RE-ORDER QUANTITY - (MINIMUM CONSUMPTION X MINIMUM RE-ORDER PERIOD
But how this formula created ?, What is the concept behaind it ?
Sameer Medhekar
(Student)
(4140 Points)
Replied 01 December 2008
| Originally posted by :Vikas Kumar Gupta | ||
| " | I am a PCC student from Chhatisgarh and I am doing total SELF-STUDY, Dear freinds and respected elders I need help from YOU!!! I have subject problem in COST and topic is -- One of the Techniques of Inventory Control is- Setting of Various Stock Levels . The formula for MAXIMUM LEVEL IS RE-ORDER-LEVEL + RE-ORDER QUANTITY - (MINIMUM CONSUMPTION X MINIMUM RE-ORDER PERIOD But how this formula created ?, What is the concept behaind it ? |
" |
Maximum Level:- This level indicates the maximum quantity of an item of material that can be held in stock at any time. The stock in hands is regulated in such a manner that normally it does not exceed this level.
The Formule is:-
Maximum Level = Reorder level -(Minimum Usage Rate x minimum lead time ) + Reorder Quantity
Significance
1> Maximum or upper limit on investment in raw material inventory.
2> level beyond which raw material should not be piled up
Aarti Garg
(Ca Student)
(161 Points)
Replied 01 December 2008
reoder level shows that the level at which further order are made
so this shud be holded by firm at a point of time
reorder qty(its best qty from cost point of view so alwz assumed that firm alwz order this qty) is the ordering qty that shud be ordered wen the firm achieves this reorder level
and min usade * min qty is deducted coz we assume that firm is consuming minimum qty on an average
so firm hold reoder level at which it order reoder qty and consumes min qty averagly
this is the concept
Pritesh Dholakia
(Audit Assistant )
(44 Points)
Replied 02 December 2008
RE-ORDER-LEVEL + RE-ORDER QUANTITY - (MINIMUM CONSUMPTION X MINIMUM RE-ORDER PERIOD
. in this re order level is minimum level of qty required.. hence if u have a stock which is minimum of the ROL then u will immidiatly book the order.. in this case since at any point of time u will have ROL in your hand + for yr daily needs u may have a particualr quantity requirement that u will be ordering for daily needs of material..i.e. re oorder level+ reorder quantity in bracket its a your consumption that will be done in normal couse of business it has to be multiplied by re order period to come to conclusion of stock minimum used in the one cycle of ordering..
| Originally posted by :Vikas Kumar Gupta | ||
| " |
I am a PCC student from Chhatisgarh and I am doing total SELF-STUDY, Dear freinds and respected elders I need help from YOU!!! c) (MINIMUM CONSUMPTION X MINIMUM RE-ORDER PERIOD is the least quentity which the company requires in the procurement time. b) RE-ORDER QUANTITY is the least orderable economic quentity (EOU) a) RE-ORDER-LEVEL is the like safty stock (not safty stock given in the book) and it is dengerous for the company to go beyond this level. 'a + b' is the total quentity which the firm would have after the receipt of 'b' if the consuption pattern is same then after the consumption of c aony 'a' will remain. howeverpractically what happens the consumption patterns is not always same and depends on consumer behaviour whose behavior is not predicable. Hence only minimum requirement of procurement period is to be deducted. Further the company makes an extra provision known as "SAFTY STOCK" to curb the flactuations of the market which is added to the value (if given in the question) to find the max level. in exams uer assumption are must because this is a subjective area and uer solution may differ. pls give feed back. |
" |
HEY GUYS NEED UR HELP I AM PCC STUDENT MY ATTEMPT IS MAY 2010. I AM GOING TO CANADA NEXT YEAR I WANT TO KNW WHETHER I HAV TO COMPLETE MY CA HEREITSELF OR HAVE TO RESTAR IN CANADA. WHAT IS THE PROCEDURE? PLZ HELP ME?can an indian pcc student complete his ca in canada.
CONTACT ME ON sakshi2gupt @ yahoo.co.in
Pranav Prasad Visapurkar
(Final Student)
(197 Points)
Replied 11 December 2008
I AM A PCC STUDENT AND I LEFT THE COCHING CLASS AND DECIDED TO SELF STUDY AS A CHALLENGEAND I AM DREAMING TO SECURE RANK IN PCE. I AM READY TO DO HARDWORK, WHAT DO YOU THINK CAN I SUCCEED?
llllVICTORllll
(Internal Auditor)
(511 Points)
Replied 14 December 2008
Pranav.... you should ask that question to yourself.... if you think you can do it, then you can do it.. give your best shot.. if you think you cant do it, then leave it man, you cant..got it? and working hard is not the solution at all, working smart is and having the dream for success is... best thing you can do is, learn from everything you see , hear and touch.. like when you see LIC office remember of sec 80 C of incometax and try to remember the elegibility for that deductin, which inturn you get the thinking about housing loan, Bingo, here comes sec 54F of same act talking about buying house as part of capital gain tax plan, but house rats have gone so high.. you need to have a business to earn so much, and if you earn so much then your turnover shud be over 40 lac, here comes sec 44AB of tax audit for that... then it goes to Audit of that business, then think if that business unit was a comapny, then you will think about company law for formation of company, about form 1 and form 32.. company aidit, then comapny eneters into negotiable instrument.. see, am thinking and am going on for ever and ever.. i think you got what i am trying to say.. dream being a rank holder and about being successful C.A .. you will be there
CAclubindia
