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QUESTION 4 PART A Suraya Bersih is a distributor of surprise balloons. Muri Cantik is a local retail outlet which sells surprise balloons. Murni's
QUESTION 4 PART A Suraya Bersih is a distributor of surprise balloons. Muri Cantik is a local retail outlet which sells surprise balloons. Murni's purchases the balloons from Suraya at RM0.85 per balloon; the balloons are shipped in cartons of 42. Suraya Bersih pays all incoming freight, and Murni Cantik does not inspect the balloons due to Suraya Bersih's reputation for high quality. Annual demand is 158,520 balloons at a rate of 3191 balloons per week. Murni Cantik earns 7% on its cash investments. The purchase-order lead time is one week. The following cost data are available: Relevant ordering costs per purchase order Carrying costs per carton per year: Relevant insurance, materials handling, breakage, etc., per year RM130.00 RM0.77 Required: a) If Murni's makes an order once per month, compute the relevant total costs. (6 marks) b) Compute the economic order quantity. (2 marks) c) Purchasing at the EOQ recommended level, how many deliveries will be made during each time period? Show your computation. (2 marks) d) Purchasing at the EOQ recommended level, compute the relevant total costs. (2 marks)
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