Two-bin system primarily helps in:
ACalculating safety stock cost
BComputing EOQ
CSetting re-order trigger
DRecording GRN value
Answer & Solution
Correct answer: C. Setting re-order trigger
1. Two-bin system keeps stock in two separate compartments.
2. When the working bin is exhausted, the reserve bin is opened and an order is placed.
3. The opening of the reserve bin acts as the re-order trigger.
4. It does not by itself compute EOQ or safety stock cost.
_Source: ICAI BoS Inter Paper 3, Ch 2 "Material Cost", §2.4.4 ¶2_
Related questions
Annual usage 5,000 units; ordering cost ₹40; carrying cost 20 percent of price ₹20. OptimaMaximum stock level formula is:EOQ when discount is offered changes when:Abnormal loss in material processing is:Stores ledger records material movements in:VED analysis classifies stores items based on:Carrying cost ₹6/unit, ordering cost ₹120/order, annual demand 18,000 units. EOQ equals:Weighted average price after receipts of 100 units at ₹10 and 200 units at ₹13 is: