QUESTION 2 (15 MARKS, 27 MINUTES) Compute the re-order level, minimum level, maximum level, average stock level for components A and B based on the following data: B (units) A (units) 150 150 Maximum consumption per week Average consumption per week Minimum consumption per week Re order period Re order quantity 100 100 50 50 8-12 weeks 4-8weeks 600 400 MARKS REQUIRED: 2.1 Why do businesses hold inventory? Give two reasons. 2 2.2 Calculate the re-order level 3 2.3 Calculate the minimum inventory level. 3 2.4 Calculate the maximum inventory level. 4 2.5 Calculate average inventory level 3 2.6 What are carrying costs? Give two examples. 2 2.7 Economic order quantity reduces the cost of holding and ordering inventory to a minimum. What are three assumption of EOQ? 3 TOTAL MARKS FOR QUESTION 2 20 3