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4.2 The soft goods department for Cadbury Schweppes sells 175 units per month of a certain large bath towel. The unit cost of a towel

image text in transcribed 4.2 The soft goods department for Cadbury Schweppes sells 175 units per month of a certain large bath towel. The unit cost of a towel to the manufacturer is R2.50 and the cost of placing an order has been estimated to be R12.00. The organization uses an inventory carrying charge of 27% of the unit cost per year. Determine the optimal order quantity, the order frequency, and the annual holding and setup cost. (6 marks) 4.3 If, through automation of the purchasing process, the ordering cost can be cut to R4.00, what will be the new economic order quantity, the order frequency, and annual holding and setup costs? Explain these results. (6 marks)

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