sape days 12 day QUESTION THREE ZETA L a manufacturing company that material QUEE its man acturing process On anual basis ZETA d es 127.00 is of material UEE in production. The materials bought for a wid e of supplers at an average price of 3 perunt because supply for material QUEE Z ETA idmantan safely inventory that is w ant to say for 12 days. The material is consumed at an even rate and the cost of placing an order is KOD order while the cost of storage is KO 10 per un per num Current ordering policy Currently, the company places orders of 20.000 unts each of material and this policy has been in place for over tveyes. However, ZETA d has recruited a new Procurement Officer and a new Finance Manager who have replaced those who have now tell the company Proposal 1 The newly recruted Procurement officer has proposed to change this ordening policy to the use of the economic order quantity model She ho explained that the use of the economic order quan model would result in some cost savings as a better ander size would be used Proposal 2 The newly recruited finance manager has information that one of the suppliers of the material has proposed to offer a quantity discount of 15 for orders of 50 000 units and more. The france manager has therefore proposed that the ordersize should be increased to 10,000 units per order ZETA Lidh a working your of 385 days Required: ja Calculate the total anal cost including the purchase cost for The current ordering policy The ordering polky based on proposat 1 The ordering policy based on proposal 2 [12 Marks] b) wed on the complain part above, explain whether ZETA Lid should continue with the current ordering policy of should change to the ordering policy based on either proposal or proposal 2 Marks] c) Explain the (5) minions of the c omic order quantky model. Is Marks] [TOTAL: 20 MARKS] Page 4 of 6 sape days 12 day QUESTION THREE ZETA L a manufacturing company that material QUEE its man acturing process On anual basis ZETA d es 127.00 is of material UEE in production. The materials bought for a wid e of supplers at an average price of 3 perunt because supply for material QUEE Z ETA idmantan safely inventory that is w ant to say for 12 days. The material is consumed at an even rate and the cost of placing an order is KOD order while the cost of storage is KO 10 per un per num Current ordering policy Currently, the company places orders of 20.000 unts each of material and this policy has been in place for over tveyes. However, ZETA d has recruited a new Procurement Officer and a new Finance Manager who have replaced those who have now tell the company Proposal 1 The newly recruted Procurement officer has proposed to change this ordening policy to the use of the economic order quantity model She ho explained that the use of the economic order quan model would result in some cost savings as a better ander size would be used Proposal 2 The newly recruited finance manager has information that one of the suppliers of the material has proposed to offer a quantity discount of 15 for orders of 50 000 units and more. The france manager has therefore proposed that the ordersize should be increased to 10,000 units per order ZETA Lidh a working your of 385 days Required: ja Calculate the total anal cost including the purchase cost for The current ordering policy The ordering polky based on proposat 1 The ordering policy based on proposal 2 [12 Marks] b) wed on the complain part above, explain whether ZETA Lid should continue with the current ordering policy of should change to the ordering policy based on either proposal or proposal 2 Marks] c) Explain the (5) minions of the c omic order quantky model. Is Marks] [TOTAL: 20 MARKS] Page 4 of 6