Question 2 You are the Chief Financial Officer Bruins Inc., a leading manufacturer of ice-hockey equipment in North America The company manufactures a range of products, including composite ice-hockey sticks The states of these composite stiks are made of achieve and policesin Estimated annual usage of graphite in Bruins inc's manufacturing process is 36.000 klograms. This is used fairy evenly throughout the your other than during August and September. In these periods, production increases to meet demand due to me start of the e-hockeyton in October and to meet demand due to the Christmas holiday in December Inventory holding costs for graphite are estimated to be $0.75 per kilograms per year. The estimated cost of placing and processing each order of graphite is $27. Throughout the year, it is estimated the graphite will contan average of 1.60 per klogram. However, forecast Nuctutions in demand mean that the cost of graphite could vary from a maximum of 5210 per kilogram and a minimum of 51.45 during the you Bruins in imports graphite from Kunlun Commodities pic, China. Recent disputes with This supplier have led Bruins Inc. to maintain a buffer nentory to manage the risk of disruption to the supply Kunlun Commodities pic offers a 5% bulk purchase Giscount on orders of gre of 10.000 Nons or more The company's approach to inventory management was consed at a recent meeting of Bruins in senior executive team. Patrice Marchand Chief Executive at Bruns Inc. advocate of just in time IT Inventaries management. Patrice has questioned the company's current approach to the management of as Inventory of graphite and has commented Holding inventores results in costs for the company. We could avoid the cost we introduce a JT proach to the management of our inventory at graphite Inventory management models and information technology are unable to help Xiaolin Fak. Chief Operating Officer w Bruns Inc. has pointed out that the succes management of inventories involves a number of practical issues Xiaolin has commented Inventory management models and information technology are used, but I'm sure that there are other issues that we need to consider. I would like to know more about the practic iplications of managing inventories Required: Calculate the economic order quarany (200) ter graphite (4 marks) +) Calculate the total al cost of graphite le) Critically evaluate Bruina in decision to use the EOQ model as part of its approach to the management of inventories is marks) (d) Advise Bruns inc's senior executive tears on the comments made by Patrice Marchand and Xiaolin Rask. Your advice should include an explanation of the costs of holding inventories, the cost of falling to manage inventories property and the practical implications of managing inventories (12 marks Question 2 You are the Chief Financial Officer Bruins Inc., a leading manufacturer of ice-hockey equipment in North America The company manufactures a range of products, including composite ice-hockey sticks The states of these composite stiks are made of achieve and policesin Estimated annual usage of graphite in Bruins inc's manufacturing process is 36.000 klograms. This is used fairy evenly throughout the your other than during August and September. In these periods, production increases to meet demand due to me start of the e-hockeyton in October and to meet demand due to the Christmas holiday in December Inventory holding costs for graphite are estimated to be $0.75 per kilograms per year. The estimated cost of placing and processing each order of graphite is $27. Throughout the year, it is estimated the graphite will contan average of 1.60 per klogram. However, forecast Nuctutions in demand mean that the cost of graphite could vary from a maximum of 5210 per kilogram and a minimum of 51.45 during the you Bruins in imports graphite from Kunlun Commodities pic, China. Recent disputes with This supplier have led Bruins Inc. to maintain a buffer nentory to manage the risk of disruption to the supply Kunlun Commodities pic offers a 5% bulk purchase Giscount on orders of gre of 10.000 Nons or more The company's approach to inventory management was consed at a recent meeting of Bruins in senior executive team. Patrice Marchand Chief Executive at Bruns Inc. advocate of just in time IT Inventaries management. Patrice has questioned the company's current approach to the management of as Inventory of graphite and has commented Holding inventores results in costs for the company. We could avoid the cost we introduce a JT proach to the management of our inventory at graphite Inventory management models and information technology are unable to help Xiaolin Fak. Chief Operating Officer w Bruns Inc. has pointed out that the succes management of inventories involves a number of practical issues Xiaolin has commented Inventory management models and information technology are used, but I'm sure that there are other issues that we need to consider. I would like to know more about the practic iplications of managing inventories Required: Calculate the economic order quarany (200) ter graphite (4 marks) +) Calculate the total al cost of graphite le) Critically evaluate Bruina in decision to use the EOQ model as part of its approach to the management of inventories is marks) (d) Advise Bruns inc's senior executive tears on the comments made by Patrice Marchand and Xiaolin Rask. Your advice should include an explanation of the costs of holding inventories, the cost of falling to manage inventories property and the practical implications of managing inventories (12 marks
