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Question 6 (6 marks) NPC Ltd is a sportswear store in Cape Town importing soccer jerseys from a Durban manufacturer. NPC sells 12,500 jerseys on
Question 6 (6 marks) NPC Ltd is a sportswear store in Cape Town importing soccer jerseys from a Durban manufacturer. NPC sells 12,500 jerseys on average per year with a purchase price of R265 per jersey. The fixed ordering cost per order incurred every time NPC places an order for jerseys from Durban is R1350. Annual carrying cost is 15%. a) What is the economic order quantity of jerseys for NPC? (2 marks) b) Calculate the total inventory cost. (3 marks) c) Assume a 120-unit safety stock is carried. What will the additional inventory cost be? (1 mark)
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