Lamberatti Limited $($the Company$)$ produces luxury cars and miniature versions of the cars.

The annual demand for the miniature cars is $10,000$ units. Machine set up costs are $10$ per

set up and the cost of holding one unit of the product is $5$ per year. Assume the annual

working year consists of $250$ days.

The Company sells to two types of customers. The first type of customer are the retailers of

Lamberatti cars. These retailers give the miniature versions of the cars to good customers.

The second type of customer are novelty toy stores. The retailers of Lamberatti cars get $3$

months credit. In January the retailers will generate $100,000$ worth of sales and sales are

expected to grow by $3\%$ a month. The toy stores receive $2$ months credit and will generate

$250,000$ worth of sales in January growing at $5\%$ a month.

REQUIRED:

a$)$ Calculate the optimal production run in terms of units of output for the miniature cars.

State how many production runs there would have to be to meet annual demand. How

often would each production run take place?

$(6$ marks$)$

b$)$ Prepare an ageing schedule of receivables for the months January to March and discuss

the total amount of receivables.

$(22$ marks$)$

c$)$ Discuss why customers of the Company do not receive the same amount of time to pay.

How does a company in general decide who gets credit? What other terms need to be

decided on$?$

$(14$ marks$)$

d$)$ The Company wants to undertake a SWOT analysis. Explain what a SWOT analysis is

and give specific examples related to the Company.

$(8$ marks$)$