Please assist with my assessment

Question 1 Dr Malesa Pty Ltd (Dr Malesa) is a wholesaler that buys and sells a wide range of products, one of which is product X1. Dr Malesa sells 25 000 units of product X1 each year at a unit price of R25. Sales of product X1 normally follow an even pattern throughout the year. Further supplies of product X1 are ordered whenever the stock falls to this minimum level and the time lag between ordering and delivery is small enough to be ignored. At present, Dr Malesa buys all his supplies of product X1s from Allies Ltd, and usually purchases them in batches of 5000 units. His most recent invoice from Allies Ltd was as follows: Basic price: 5000 product X1s at R15 per unit Delivery charge: Transport at R0.50 per unit Fixed shipment charge per order R 75 000 2 500 1 000 78 500 In addition, Dr Malesa estimates that each order he places costs him R500, comprising administrative costs and the cost of sample checks. This cost does not vary with the size of the order. Dr Malesa estimates that the holding costs amount to R15,50 per product X1 per annum. Dr Malesa has recently learnt that another supplier of product X1, Gold Ltd, is willing, unlike Allies Ltd, to offer discounts on large orders. Gold Ltd sells product X1 at the following prices: Order size 1-2999 3000-4999 5000 and over Price per unit (R) 12.25 11.50 11.25 In other respects (i.e. delivery charges and the time between ordering and delivery) Gold Ltd's terms are identical to those of Allies. Required: (a) Calculate the optimal re-order quantity for product X1 and the associated annual profit Dr Malesa can expect from their purchase and sale, assuming that he continues to buy from Allies LTD; (10 Marks) (b) Prepare calculations to show whether Dr Malesa should buy product X1 from Gold Ltd rather than from Allies Ltd and, if so, in what batch sizes. (10 Marks) Ignore taxation. Question 1 Dr Malesa Pty Ltd (Dr Malesa) is a wholesaler that buys and sells a wide range of products, one of which is product X1. Dr Malesa sells 25 000 units of product X1 each year at a unit price of R25. Sales of product X1 normally follow an even pattern throughout the year. Further supplies of product X1 are ordered whenever the stock falls to this minimum level and the time lag between ordering and delivery is small enough to be ignored. At present, Dr Malesa buys all his supplies of product X1s from Allies Ltd, and usually purchases them in batches of 5000 units. His most recent invoice from Allies Ltd was as follows: Basic price: 5000 product X1s at R15 per unit Delivery charge: Transport at R0.50 per unit Fixed shipment charge per order R 75 000 2 500 1 000 78 500 In addition, Dr Malesa estimates that each order he places costs him R500, comprising administrative costs and the cost of sample checks. This cost does not vary with the size of the order. Dr Malesa estimates that the holding costs amount to R15,50 per product X1 per annum. Dr Malesa has recently learnt that another supplier of product X1, Gold Ltd, is willing, unlike Allies Ltd, to offer discounts on large orders. Gold Ltd sells product X1 at the following prices: Order size 1-2999 3000-4999 5000 and over Price per unit (R) 12.25 11.50 11.25 In other respects (i.e. delivery charges and the time between ordering and delivery) Gold Ltd's terms are identical to those of Allies. Required: (a) Calculate the optimal re-order quantity for product X1 and the associated annual profit Dr Malesa can expect from their purchase and sale, assuming that he continues to buy from Allies LTD; (10 Marks) (b) Prepare calculations to show whether Dr Malesa should buy product X1 from Gold Ltd rather than from Allies Ltd and, if so, in what batch sizes. (10 Marks) Ignore taxation