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Fajar Corp., plans to order 4,732 units of inventory each time, every 4 weeks for the coming year. Assume 52 weeks a year. The firm
Fajar Corp., plans to order 4,732 units of inventory each time, every 4 weeks for the coming year. Assume 52 weeks a year. The firm wants to maintain a safety stock of 3,000 units of inventory. The firm's estimated inventory ordering cost is RM273 per order, whereas inventory carrying cost is RM6 per unit per year. You, a fresh UUM graduate, have just joined Fajar Bhd., and have been tasked to improve its inventory management. You find out that the supplier takes a week to supply the inventory to the firm from the order date. Having accounted for the supplier delivery time, you think that maintaining a 3-day demand for inventory as safety stock would be enough for the firm. (c) What should be the firm's safety stock and inventory re-order point for next year, under your proposed plan? (2 marks) (d) How many units of inventory should Fajar Bhd.'s order each time, and how many times should it order next year, to minimise its total inventory carrying and ordering costs? (4 marks) (e) What would be the estimated total inventory carrying and ordering costs for next year, under your proposed plan? (1.5 marks)
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