Question
i. Bunny Rabbit Batteries buys 4,800 battery casings per year. The cost of placing an order has been estimated to be $45.00. The store uses
i. Bunny Rabbit Batteries buys 4,800 battery casings per year. The cost of placing an order has been estimated to be $45.00. The store uses an inventory carrying charge of $2.50 per casing per year. Determine the economic order quantity, order frequency, and the annual cost of inventory. ( 3 marks)
ii. If, through automation of the purchasing process, the ordering cost can be cut to $25.00, considering the existing holding cost what will be the new economic order quantity, order frequency, and annual inventory management cost? ( 3 marks)
Explain these (I &II) results. (1 marks)
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