Question 4 (12)

Love for books bookstore expects sales of R10 000 000,00 next year. Each book sells for R200,00 and variable costs applicable in each sale are expected to be 45% of sales. The total cost of placing an order with service providers is estimated to be R5 000,00 per order. The service providers take about 30 days to deliver new stock. It costs the business R3 000,00 to carry one unit of stock per year. Meanwhile, it was estimated that the fixed costs amount to R4 000 000,00. The desired safety stock for Love for books bookstore is 6 000 units.

Question 4.1 (5)

Calculate the Economic Order Quantity for Love for bookstore

Question 4.2 (3)

Calculate the reorder point in units for Love for bookstore

Question 4.3 (4)

Calculate the breakeven point for Love for bookstore