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Sipho Masekwa has a machine shop that uses 2500 switches during the course of a year and this usage is relatively constant throughout the year.
Sipho Masekwa has a machine shop that uses 2500 switches during the course of a year and this usage is relatively constant throughout the year. The switches are purchased from a supplier 160 kilometres away, for R15 each and the lead time is 2 days. The holding cost per switch is R1.50 (or 10% of the unit cost) and the ordering cost is R18.75 per order. There are 250 work days per year. Answer the following questions, showing the formula used for each. 3.1. What is the EOQ? (2) 3.2. Given the EOQ, what is the average inventory? (2) 3.3. What is the annual inventory holding cost? (2) 3.4. In minimizing cost, how many orders would be made each year?(2) 3.5. What is the average demand per day?(2) 3.6. What is the annual ordering cost?(2) 3.7. What is the ROP?(2)
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