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can you give me the answer with explanation. Mill Bhd. is a retailer of wine bottles. The company has an annual demand of 36,750 bottles.
can you give me the answer with explanation.
Mill Bhd. is a retailer of wine bottles. The company has an annual demand of 36,750 bottles. The bottles cost RM12 each. The EOQ is 3,500 bottles. The ordering costs are RM200 per order. The annual cost of holding one bottle in stock is estimated to be 10% per annum. The lead time from placing an order to its receipt is 20 days. The company's suppliers have recently offered a quantity discount of 2% on orders of at least 5,000 bottles and 2.5% on orders of at least 7,500 bottles. You are required to: (a) Calculate the total costs for purchasing at the EOQ, 5,000 bottles, and 7,500 bottles respectively, and state which quantity per order should be ordered as the least-cost order quantity (8 marks) (b) Given that the company has revised its annual demand to 40,150 bottles, and the usage of the bottles is constant throughout the year (365 days), calculate the stock level (in bottles) at which an order to restock should be placed. (2 marks) (c) Briefly list three (3) assumptions which underlie the EOQ formula in order for it to be useful for a companyStep by Step Solution
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