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Question 2 You are the warehouse manager for OLAM. The information that follows should help you determine your stock control levels. Annual Demand =
Question 2 You are the warehouse manager for OLAM. The information that follows should help you determine your stock control levels. Annual Demand = 4000 Cost of material per unit = $50.00 Cost of placing and receiving one order = $40.00 Carrying and storage cost = 8% per annum of Inventory Value Further information given is Minimum consumption: 100 units per week each Maximum consumption: 150 units per week each Normal consumption: 120 units per week each Reorder quantity is the same as the Economic Order Quantity Reorder period: 4 to 6 weeks, Maximum reorder period for emergency purchases is 2 weeks respectively. You are required to calculate: a) Economic Order Quantity b) Reorder level c) Maximum Stock Level d) Minimum Stock Level e) Average stock Level
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