Light bulbs:
The probable cost structure of light bulbs is as follow (Apte, Maglaras, and Pinedo, 2008):
Item cost:
Light bulbs are purchased in bulk quantity because it has a small packaging and do not have an expiry date so it can be stored for a longer period as well.
Carrying cost:
It has a high carrying cost because of the bulk purchasing it need space to get store or placed for a long period until it gets to sell.
Ordering cost:
It has one time ordering cost in a month because it is in bulk quantity so it is delivered by the truck for once in a month.
Stock out cost:
It has a low stock out cost because it is available in the store and meets the demand of the people.
Compact disk:
The probable cost structure of compact disk is as follow (Krajewski, Ritzman, & Malhorta, 2007):
Item cost:
It has a high cost because it purchases by the retailers when its demand gets increased in the market.
Carrying cost:
It has an average carrying cost because it does not occupy a large space. It is placed on its shelf.
Ordering cost:
It has a low ordering cost because it is purchased in the bulk quantity.
Stock out cost:
It has low chances to stock out from the store because it is stored in the bulk quantity so it has low stock out cost.
Refrigerated drugs:
The probable cost structure of refrigerated drugs is as follow (Schroeder, Goldstein, and Rungtusanatham, 2012):
Item cost:
It is purchased by the retailers in low quantity because it comes with the expiry date. So the retailers purchased it just to meet the demand of the people.
Carrying cost:
It has a high carrying cost because it is stored in the refrigerators.
Ordering cost:
It has high ordering cost because it is ordered with a very little time difference so it is ordered five to ten times in a month.
Stock out cost:
It has a high stock out cost because it is in small quantity in the retailer’s refrigerator. So it faces the gap between demand and supply for few times in a month.
References
Apte, U., Maglaras, C. and Pinedo, M. (2008). ‘Operations in the Service Industries: Introduction to the Special Issue’. Production and Operations Management, 17( 2), 235–237
Krajewski, L.J., Ritzman, L.P., &Malhorta, M.K. (2007).Operations management: processes and value chains. New Jersey, USA: Pearson Prentice Hall.
Schroeder, R., Goldstein, S., and Rungtusanatham, M. (2012). Operations management in the supply chain: decisions and cases. New York: McGraw-Hill/Irwin
