e. Guardian's beginnings can be traced back to 1967, when it was set up to cater...
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e. Guardian's beginnings can be traced back to 1967, when it was set up to cater for the community's need for pharmaceutical and quality personal care products. Since then, the concept of providing specialised health and beauty products in a professional environment have gained popularity and Guardian started to expand. Guardian is now part of the DFI Retail Group, which has operations throughout Malaysia, Brunei, guardian Singapore, Indonesia, Vietnam and Cambodia. The stores in Malaysia are owned by Guardian Health and Beauty Sdn Bhd. The Company's line of business Dettol includes the retail sale of We Protect What We Love prescription drugs, proprietary drugs, and non-prescription medicines. The company normally sell 18,000 boxes of its Dettol Shower Gel every month. The store is open seven days a week and expects to sell the same number of boxes every month. The average selling price is RM 31.90 per bottle, the carrying cost is RM 13.60 per box and the fixed order cost is RM 747. Continued... HH 8/15 BFM 1014 / BFBM 1014 FUNDAMENTALS OF FINANCE APRIL 2022 Based on the information above: i. What is the total carrying cost? (2 marks) ii. What is the restocking cost? (2 marks) iii. What is the total cost? 9/15 iv. What is the economic order quantity for the store? Is Guardian having an optimal inventory policy in terms of inventory cost, order V. size and order frequency. Justify your answer by showing the details working by comparing using the current quantity order and the EOQ. (3 marks) e. Guardian's beginnings can be traced back to 1967, when it was set up to cater for the community's need for pharmaceutical and quality personal care products. Since then, the concept of providing specialised health and beauty products in a professional environment have gained popularity and Guardian started to expand. Guardian is now part of the DFI Retail Group, which has operations throughout Malaysia, Brunei, guardian Singapore, Indonesia, Vietnam and Cambodia. The stores in Malaysia are owned by Guardian Health and Beauty Sdn Bhd. The Company's line of business Dettol includes the retail sale of We Protect What We Love prescription drugs, proprietary drugs, and non-prescription medicines. The company normally sell 18,000 boxes of its Dettol Shower Gel every month. The store is open seven days a week and expects to sell the same number of boxes every month. The average selling price is RM 31.90 per bottle, the carrying cost is RM 13.60 per box and the fixed order cost is RM 747. Continued... HH 8/15 BFM 1014 / BFBM 1014 FUNDAMENTALS OF FINANCE APRIL 2022 Based on the information above: i. What is the total carrying cost? (2 marks) ii. What is the restocking cost? (2 marks) iii. What is the total cost? 9/15 iv. What is the economic order quantity for the store? Is Guardian having an optimal inventory policy in terms of inventory cost, order V. size and order frequency. Justify your answer by showing the details working by comparing using the current quantity order and the EOQ. (3 marks)
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