Question
FatBoy Tech Enterprise (FatBoy) is a company involved in selling and distributing tablet computers for the use of school children around the state of Kedah
FatBoy Tech Enterprise (FatBoy) is a company involved in selling and distributing tablet computers for the use of school children around the state of Kedah and Perlis for online learning activities. The following is information related to inventory, storage costs and carrying costs for FatBoy:
Orders must be placed in multiples of 200 units. Annual tablet computer sales are 20,000 units. Carrying cost is 5% of the purchase price. Purchase price is RM120 / unit. The cost of the order is RM50 / order. Security stock is 50 units. Delivery time is 4 days.
Based on the above information and assuming there are 365 days in a year:
i. Determine the Economic Order Quantity (EOQ) level for FatBoy. (3 marks)
ii. How many orders does FatBoy have to make in a year? (2 marks)
iii. Determine the inventory order point. (4 marks)
iv. Determine the average inventory level. (3 marks)
v. Calculate the total inventory cost for FatBoy. (2 marks)
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