ANSWER ALL QUESTIONS QUESTION 125 marks) Gore Limited is a supplier of car parts, located in Montego Bay. The company sells a variety of car parts but specializes in the sale of front end parts for Nissan vehicles to small businesses and individual consumers. One of their products is a special high performance shock absorber The shock absorbers are sold in pairs for $7 000 per package. After several years it has been determined that the demand for the shock absorbers averages 500 packages per month The highest sale ever recorded per day is 20 packages and the lowest sale recorded per day is 12, packages. The high performance shock absorbers cost Gore Limited $3800 The packages are purchased directly from the manufacturers in Houston, Texas and sent by airfreight Delivery can be expected in 4 to 7 days after the order is placed The ordering cost is S4200 per order and the carrying cost is 10% per annum 2. The minimum control level 640-650055)-140-58.65 Required: A: Calculate for the company: 1. The teander level 20 X? = 14076 (2 marks) (2 marks) The economic order quantity Plus **) (6 marks 4. The maxintum control level (3 marks) 5. The total cost of buying and carrying shock absorbers for the year based on the EOQ (4 marks) B: At a recent meeting, David Harrison, one of Gore's senior managers stated that the company should not use the EOQ model because it is based on unrealistic assumptions and no one in the company understands how the model works, especially when purchase discounts are involved" Draft a memo addressed to the company's managing director, to respond 10 Mr. Harrison's concerns (8 marks) 216542 b/ X 4200 4713 ANSWER ALL QUESTIONS QUESTION 125 marks) Gore Limited is a supplier of car parts, located in Montego Bay. The company sells a variety of car parts but specializes in the sale of front end parts for Nissan vehicles to small businesses and individual consumers. One of their products is a special high performance shock absorber The shock absorbers are sold in pairs for $7 000 per package. After several years it has been determined that the demand for the shock absorbers averages 500 packages per month The highest sale ever recorded per day is 20 packages and the lowest sale recorded per day is 12, packages. The high performance shock absorbers cost Gore Limited $3800 The packages are purchased directly from the manufacturers in Houston, Texas and sent by airfreight Delivery can be expected in 4 to 7 days after the order is placed The ordering cost is S4200 per order and the carrying cost is 10% per annum 2. The minimum control level 640-650055)-140-58.65 Required: A: Calculate for the company: 1. The teander level 20 X? = 14076 (2 marks) (2 marks) The economic order quantity Plus **) (6 marks 4. The maxintum control level (3 marks) 5. The total cost of buying and carrying shock absorbers for the year based on the EOQ (4 marks) B: At a recent meeting, David Harrison, one of Gore's senior managers stated that the company should not use the EOQ model because it is based on unrealistic assumptions and no one in the company understands how the model works, especially when purchase discounts are involved" Draft a memo addressed to the company's managing director, to respond 10 Mr. Harrison's concerns (8 marks) 216542 b/ X 4200 4713