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Question 4: (30 marks) The following represent four independent situations/cases where one amount is missing in each case. Products/ cases EOQ A Annual Quantity 5,000
Question 4: (30 marks) The following represent four independent situations/cases where one amount is missing in each case. Products/ cases EOQ A Annual Quantity 5,000 ? 4,225 3,500 Carrying (Holding) Cost/Unit $2 $20 $0.10 $? B Ordering Cost/Order $? $10 $5 $5 400 120 D 125 Required: 1. Calculate the missing figures for each of the four products. (12 marks) 2. Calculate the number of orders that will be placed each year for each of the products (8 marks) 3. Currently, the company purchases product B for $100 per unit. The company has been offered a 2 per cent discount on the cost of product B if it places orders in quantities of 1,200. Show the total cost at each of the EOQ & discount. What decision should the company take and why? (10 marks)
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