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Question 21 40 marks) Al-Medina Comperty carries a wide assortment of items for its customers. One item, KGS is very popular. Desirous of kping its
Question 21 40 marks) Al-Medina Comperty carries a wide assortment of items for its customers. One item, KGS is very popular. Desirous of kping its stock under control, a decision is taken to order only the optimum coonomic quantity, for this item, each time. You have the following information. Annual demand (units) 72,000 Purchase price per unit S 200 Carrying Holding costs per unit $6 Cost per order $ 375 Required: 1. Determine the EOQ using the equation method (8 marks) 2. Fill the blanks in the following table using the above data (12 marks) 1 10 No. of orders Order size 20 30 90 120 Average stock Carrying (Holding) costs Order costs Total costs 3. Calculate the holding, ordering cost & their total cost at the EOQ level.( 6 marks) 4. Plot the graph at the EOQ level showing the numbers (3 marks). List at least 5 types of holding costs (3 marks) 5. Al-Medina has been offered a 1 per cent discount on the cost if it places orders in quantities of 18,000. Discuss whether the company should accept the discount and place larger orders, show your workings (8 marks)
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