Simeon runs a business that imports tables from China for sale in the UK. The supplier sells these to Simeon in batches of 1,000 units. Historically sales demand has been stable and relatively even throughout the year, at a rate of 2.500 units per month (2018 to 2020). In the period January to June 2021 however this increased to 3,000 per month, and they have run out of stock every month as a result. They have estimated that each stock out has cost them 1,000 each in lost business. Simeon has had this problem before in 2018 (6 stock outs) and 2019 (3 stock outs) but in 2020 he had fixed the problem and achieved no stock out events. Each batch, including shipping and taxes costs 2,500. The cost of placing and processing each order, regardless of quantity, is 100. Records show the following average stock holdings and associated costs: 2018 500 units 1,200 2019 750 units 1,700 2020 1,250 units 2,700 Required: a) If the increased demand seen so far in 2021 continues, what is the the optimum order size you would recommend to Simeon? b) Also, what is the optimum base stock level? [10 marks] [7 marks] c) For each of the two areas above, explain the results and advise Simeon on the potential impacts of unexpected delays in the supply chain. [8 marks] The following are extracts from a typical Independent Auditor's Report for a listed company in the UK. From the perspective of an external user of financial information, critically discuss the extent to which the statements offer reassurance over the reliability of the information reported and the effectiveness of the management of the company. "In relation to the company's reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or to draw attention to in the relation to the directors' statement..." "... we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate." "In our opinion the financial statements give a true and fair view of the state of the company's affairs..." You answer is expected to consider each of the three extracts equally