Question 2.2 (15 marks) An organisation manufactures a single product. The following information with regard to the raw material needed in the production process is supplied to you: Page 14 of 25 Normal delivery time: Maximum delivery time: Normal usage: Purchase price per unit: Cost of placing an order: Interest rate: Storing cost per unit: 2.5 weeks 3.5 weeks 52 000 units per year N$8.50 N$18.00 2% per year N$2.50 Requirement Mark Sub- Total total 5 5 7 2 9 2 11 2.2.1 Calculate the Economic Order Quantity (E0Q). Calculate the re-order point if the organisation does not keep safety 2.2.2 (minimum level) inventory Calculate the re-order point if the organisation has a policy to keep 2.2.3 safety inventory Calculate the safety inventory that should be kept by the 2.2.4 organisation. Using your answers to the calculations above where relevant, 2.2.5 calculate the company's total inventory costs (holding plus ordering) for the year. Note: Show all the necessary workings or steps that are required to reach the answer. Marks are available for these Total 4 15 15