a$)$ Manipa Berhad plans to start selling new products. The company is planning to use an

economic order quantity model to establish the reorder quantity for $x$ materials. The

company does not plan to hold any stock for the new product. The purchasing price of

the material is RM$70$ per unit, ordering cost RM$100$ per order and the total unit sold is

$80000$ units per year with the holding cost of $6\%$ of the purchase price.

Calculate the following for each project:

i$)$ Calculate the economic order quantity and the total cost of inventory for the new

product.

ii$)$ Manipa Berhad has managed to negotiate a bulk purchase discount of $1,5$ percent

for a standard order size of $20000$ units. Calculate the total cost inventory for the

bulk purchases.

$(8$ Marks$)$

iii$)$ Based on the answer in $($ii$),$ advice whether the discount offered by the supplier

should be accepted or not.

$(2$ Marks$)$

b$)$ Gemilang Limited make their purchase under the term $\frac{2}{10}$ net $30.$

i$)$ If Gernilang Limited foregoes the discount and pays for its purchase according to

the terms of its trade credit, calculate the effective cost of using this source of

credit.

$(3$ Marks$)$

ii$)$ In case Gemilang Limited forgoes the discount but does not pay for its purchases

until day $30,$ calculate the effective cost of using this source of credit without

penalty.

$(2$ Marks$)$

$($Total: $25$ Marks$)$