Question
a) Giving appropriate industry or organizational based examples, distinguish between pull and push demand. (4 Marks) b) The break-even point between production method A with
a) Giving appropriate industry or organizational based examples, distinguish between pull and push demand. (4 Marks) b) The break-even point between production method A with a fixed cost of $ 600 and production method B with fixed cost of $ 450 is 1200 units. Plot the data and determine the method to use for a volume of 2400 units. (6 Marks ) c) An entrepreneur requires 40,000 units of raw materials of a particular type in a year. Stock holding costs are 10% of the purchase price per item and each item cost K.sh. 8.00. The cost of placing an order is K.sh. 64 and the assumptions of a simple stock control model are believed to hold. Using algebra, establish the economic order quantity (E.O.Q), highlighting the assumptions used. (10Marks)
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