Adong's Fishing Products is analyzing the performance of its cash management. On average,

the firm holds inventory for $65$ days, pays its suppliers in $35$ days, and collects its receivables

in $15$ days. The firm has a current annual outlay of $$1,960,000$ on operating cycle investrnents.

Adong currently pays $10$ percent for its financing. $($Assume a $360-$day year.$)$

$($a$)$ What is the firm's operating cyele? $(1$ Mark$)$

$($b$)$ What is the firm's cash conversion cycle? $($I Mark$)$

Assume in the above question that Adong's Products uses $800$ units of a product per year on a

continuous basis. The product has carrying costs of $$50$ per unit per year and order costs of

$$300$ per order. It takes $30$ days to receive a shipment after an order is placed and the firm

requires a safety stock of $5$ days usage in inventory.

$($d$)$ What is the economic order quantity $($EOQ$)?(1$ Mark$)$

$($e$)$ What is the reorder point? $($Assume a $360-$day year.$)(1$ Mark$)$