1. Greenview Sdn. Bhd. forecasts that it needs 120,000 units of inventory per year with a cost of RM10 per unit. The holding cost is RM0.70 per unit while the ordering cost is RM18 per order. The delivery period will take 10 days once an order is placed. (Assume there are 360 working days per year).

You are required to:

1. Calculate the Economic Order Quantity (EOQ).

2. Determine the reorder point.

3. Calculate the total yearly cost of inventory.

( 5 )

( 3 )

( 5 )

4. If Greenview Sdn. Bhd. orders 3000 units, the supplier will give a quantity discount of 1%. Should Greenview Sdn. Bhd. take this opportunity by accepting the discount and place an order of 3000 units? Show the calculation to support your answer.