pomm the TOSI COSI 9.30 eactiseado PR 2UXP (1) Economic Order Quantity (EOQ)- S Where U Annual requirement = 75,000 Units Ordinary Cost = 18 per order Carrying Cost per unit per annum = 20% of average inventory S 2x75,000 x18 0.30 3.000 units Working Note: Total Carrying Cost 75,000 X 1.50 x 20 100 r53 Carrying Cost per unit = 322,500/75,000 - 20.30 Frequency of Orders: Number of order per year = 75,000/3,000 = 25 orders Orders may be placed in every 14.6 days, i.e. 365/25 - 14.6 days Re-order point = (Lead Time x Normal usage) + safety stock (1.5 months x 6,250 units per month) + 3,250 units = 12,625 units Or (ii) EOQ when the cost per value is 24.50 2x 75,000x18 1732 units 0.90 75,000 x4.50 x 20 Total Carrying Cost - *67.500 100 Carrying Cost per unit = 67,500/75,000 = 30.90 XYZ Ltd. are the manufactures of tyre tubes for cars. The following are the details of their operations during the current financial year: Ordering cost (per order) 100 Inventory carrying cost (per annum) 20% Cost of tubes (per tube) 3500 Normal usage (tubes per week) 150 Minimum usage (tubes per week) 50 Maximum usage (tubes per week) 200 Lead time to supply (weeks) 6-8 You are required to calculate: (0) Economic order quantity. If the supplier is willing to supply quarterly 1,500 units at a discount of 5 per cent, is it worth accepting? (ii) Re-order level (iii) Maximum level of stock (iv) Minimum level of stock