QUESTION 2 (20 MARKS)

2.1 The Warren Fischer Computer Corporation purchases 8000 transistors each year as components in minicomputers. The unit cost of each transistor is R10, and the cost of carrying each single transistor in inventory for the year is R3. Ordering cost is R30 per order. Calculate the optimal order quantity, the expected number of orders placed each year, the expected time between the orders? Assuming that fisher operates a 200-day working year. (10 marks)

2.2 At Modern Lumber Inc, Moise Ngwenya the producer of apple crates sold to growers, has been able with his current equipment, to produce 240 crates per 100 logs. He currently purchases 100 logs per day, and each log requires 3 labor-hours to process. He believes that he can hire a professional buyer who can buy a better-quality log at the same cost. If this is the case, he can increase production to 260 crates per 100 logs. His labour hours will increase by 8 hours per day. What will be the impact on productivity (measured in crates per labor-hour) if the buyer is hired? (10 marks)

SECTION B Answer any THREE questions of your choice [60 MARKS] QUESTION 2 (20 MARKS) 2.1 The Warren Fischer Computer Corporation purchases 8000 transistors each year as components in minicomputers. The unit cost of each transistor is R10, and the cost of carrying each single transistor in inventory for the year is R3. Ordering cost is R30 per order. Calculate the optimal order quantity, the expected number of orders placed each year, the expected time between the orders? Assuming that fisher operates a 200-day working year. (10 marks) 2.2 At Modern Lumber Inc, Moise Ngwenya the producer of apple crates sold to growers, has been able with his current equipment, to produce 240 crates per 100 logs. He currently purchases 100 logs per day, and each log requires 3 labor-hours to process. He believes that he can hire a professional buyer who can buy a better-quality log at the same cost. If this is the case, he can increase production to 260 crates per 100 logs. His labour hours will increase by 8 hours per day. What will be the impact on productivity (measured in crates per labor-hour) if the buyer is hired? (10 marks)