( b ) The following details are available on a popular item used by BAFBA Ltd:

Consumption of materials per month.............................20000 kgs

Cost of placing an order ............................................K800

Price per kg ............................................................. K32

Cost of storage.............................................................8%

REQUIRED:

Using the details abovecalculate:

(i) The EOQ , using the Appropriate formula

(ii) the number of orders to be placed in a year

(iii) In relation to EOQ , briefly explain the behavior of Ordering Costs and Carryingor Storage Costs( 4 marks)