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LTK Ltd uses the EQO inventory management model and purchases 6 4 0 0 0 units of raw materials per year. The purchase price of

LTK Ltd uses the EQO inventory management model and purchases 64000 units of raw materials per year. The purchase price of the raw material is r100 per unit. The cost of holding one units in inventory is R12.00 per year. The cost of reordering and taking delivery is R1500 per order of the size of the order.Experience has shown that the supplier of the raw material can be unreliable and that the delivery period can range between one week and three weeks.
Required:
If the company wants to hold enough raw materials to ensure that it never runs out, calculate the lowest inventory level at which raw material should be reordered
A.2462 units
B.3692 units
C.2600 units
D.1231 units

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