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Section B Question 11 ZEN Limited uses 5,000 units of its main raw material per month. The material costs $4 per unit to buy,

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Section B Question 11 ZEN Limited uses 5,000 units of its main raw material per month. The material costs $4 per unit to buy, supplier's delivery costs are $25 per order and internal ordering costs are $2 per order. Total annual holding costs are $1 per unit. The supplier has offered a discount of 1% if 4,000 units of the material are bought at a time. Required: Establish the economic order quantity (EOQ) ignoring the discount opportunities.

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