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PLEASE HELP ME ON THIS ......................... EMERGENCY .................... (b) Pacific Berhad is using the economic order quantity (EOQ) model to determine the optimal order size
PLEASE HELP ME ON THIS ......................... EMERGENCY ....................
(b) Pacific Berhad is using the economic order quantity (EOQ) model to determine the optimal order size for its inventory system. The following are the details of its inventory: Purchase cost RM25 Annual demand 10,000 units Annual carrying cost 10% of purchase cost. Ordering cost per order RM500 per order (i) Calculate the economic order quantity (EOQ) to the nearest whole unit. (3 marks) Assuming that it takes 15 days to receive an order once it has been placed, and a safety stock of 50 units is required, determine the re-order point. (Use a 365-day year). (3 marks) (iii) Why do firms maintain safety stock? (3 marks) (iv) Explain the different viewpoints about appropriate inventory levels that should be maintained by firms. In your opinion, how could the differing views be resolved? (7 marks) [Total: 30 marks]Step by Step Solution
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