Question
2. From the following information, prepare a material cost report showing the following: (a) Minimum Stock Level (b) Re-order Stock Level (c) Maximum Stock level
2. From the following information, prepare a material cost report showing the following: (a) Minimum Stock Level (b) Re-order Stock Level (c) Maximum Stock level and (d) Economic Order Quantity. 10000 units of material will be used every day for a 360 days year. Each unit of the material cost $800 and it will cost 10% of the amounts to hold each unit in store. It will cost $25000 to place each order. Daily usage of material will not exceed 10500 units and will not be less than 9500 units. The maximum period of delivering order by the supplier is 4 days while the shortest delivering period could be 2 days.
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