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Question 5 [34] Earthgrow Ltd is is a producer of a wide range of vegetables for the retail industry The company uses large quantities of
Question 5 [34] Earthgrow Ltd is is a producer of a wide range of vegetables for the retail industry The company uses large quantities of fertilizer. The fertilizer supplier has introduced a volume-based discount scheme as indicated in the table below for its customers. Discount scheme Discount Order size 0% 0-5 000 6% 5 001-7 000 8% 7 001-10 000 Earthgrow's production manager is considering the discount scheme and requested your assistance to make an informed decision. He provided the following information: of 144 000 Annuai demand (100 kg bags fertilizer) Cost of one unit of the product Fixed cost per order Annual holding cost per unit Economic order quantity (EOQ) R6.20 R25 00 18% of unit cost 2535 Required: Show all calculations and round off all answers to two decimals. Should the company consider taking any of the discounts on order quantities offered
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