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Sesuji Cakery Enterprise produces varieties of instant cake mix flour. The most popular product Sesuji produces is Gingerist Cake. One of the raw materials used
Sesuji Cakery Enterprise produces varieties of instant cake mix flour. The most popular product Sesuji produces is Gingerist Cake. One of the raw materials used to produce Gingerist Cake is a premium pastry flour called 'Cucuki'. A unit of Gingerist Cake requires 0.5 kg of Cucuki. The bakery produces 320 units to 530 units of Gingerist Cake per week. The demand for the Gingerist Cake is constant at 450 units per week. Currently, the Cucuki are purchased from France with the cost of RM100 per kg. It takes 1 to 3 weeks for the Cucuki to be delivered. The telephone charges in making the order is RM27 per order and the cost of printing and stationery is RM13 per order. The storage cost for each kilogram of stock is 10% from the cost of Cucuki. (Assume there is 50 weeks in a year). Required: Calculate the followings inventory control level for Cucuki: i. Economic Order Quantity (EOQ) using formula method. ii. Reorder level. Maximum stock level. jii
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