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Question 2 ( 1 4 marks ) Nkurenkuru Plumbing CC uses both plastic and steel pipes in when building water and sewage systems in residential

Question 2
(14 marks)
Nkurenkuru Plumbing CC uses both plastic and steel pipes in when building water and sewage systems in residential homes as well commercial buildings. The business orders 3000 plastic pipes from its main supplier Eenhana Engineering Limited. Nkurenkuru Plumbing CC periodically orders a quantity that reduces the holding and carrying costs to a minimum. The pipes cost N$150 per unit (having a length of 10 metres) when bought in quantities agreed with the main supplier. The carrying cost is estimated to be 2% of unit cost of a pipe while it costs N$180 to order and process the delivery. It takes a maximum of 45 days to receive the pipes from the date the order is made and the maximum pipes used is a monthly average based on the annual requirement. Assume that there are 365 days in a year and 30 days in a month.
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