Saro engineering Ltd, purchases its requirement for component SEP504 at a price of K80.00 per unit. Its annual usage of component SEP504 is 8760 units. The annual holding cost of one unit og component SEP504 is 5% of its purchase price and the cost of placing an order is K12.50. Calculate: (a) The economic order quantity (to the nearest unit) (b) Stock level (in units) at which order should be placed, assuming that usage of component SEP504 is constant through out the year (365 days) and that the lead time from placing an order to its receipt is 21 days. (c) (i) (ii) Explain the term 'stock out' and 'buffer (safety) stock. Briefly describe the circumstances in which Saro Engineering Ltd, should consider a buffer stock of component SEP504