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a) The ABC Co. is planning to stock a new product. The ABC Co has developed the following information: Annual usage = 5400 units Cost
a) The ABC Co. is planning to stock a new product. The ABC Co has developed the following information: Annual usage = 5400 units Cost of the product = 365 MU/unit Ordering cost = 55 MU/order Carrying cost = 28% /year of inventory value held Required: i. The ABC Co. uses the Economic Order Quantity (EOQ) as part of its materials control policy. State the objective of EOQ. [5m] ii. Determine the optimal number of units per order [5m] iii. Find the optimal number of orders/year [5m] iv. Find the annual total inventory costs [5m) b) Explain the followings in the contexts of materials control: i. ii. continuous stocktaking perpetual inventory system [5m] (PO3, CLO3)
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