the steady monthly demand for the electrical power supply unit was 250 units. the selling price of an electrical power supply unit was R80 000 and a mark-up of 60% on cost was used. all the sales are on credit and the

collection period is 90 days. collection costs of approximately R100 per unit sold were incurred. the annual holding cost if an electrical power supply units was R50. the cost of capital was 15%. calculate the annual carrying costs based on eoq. ignore opportunity costs

To improve its working capital management Electrosol L progressive manager, Mariam Dube, who was responsible for all aspects per. she started her iob at the company, she discovered that credit was granted to tory was maintained to prevent stock-0 R50. The cost of capital was 15%, After two months of employment Mariam Dube made the following proposals to the directors: The company should take advantage of a 5% discount from the manufacturer by ord A discount of 45% a ordering the economic order quantity. this is likely to apply to 30% of the sales. [30 MARKS] QUESTION 1 REQUIRED 1.1 Critically discuss the working capital policy of the company before Mariam Dube was employed 1.2. Calculate the annual carrying costs based on the EOQ. (Ignore the opportunity cost.) 1.3. Calculate the annual profit to the company, without considering Mariam Dube's proposals. Ignore (5) the holding and ordering costs. 1.4. How much will the net annual saving from purchasing be if the company takes advantage of the 5% manufacturer's discount, as proposed by Mariam Dube? To improve its working capital management Electrosol L progressive manager, Mariam Dube, who was responsible for all aspects per. she started her iob at the company, she discovered that credit was granted to tory was maintained to prevent stock-0 R50. The cost of capital was 15%, After two months of employment Mariam Dube made the following proposals to the directors: The company should take advantage of a 5% discount from the manufacturer by ord A discount of 45% a ordering the economic order quantity. this is likely to apply to 30% of the sales. [30 MARKS] QUESTION 1 REQUIRED 1.1 Critically discuss the working capital policy of the company before Mariam Dube was employed 1.2. Calculate the annual carrying costs based on the EOQ. (Ignore the opportunity cost.) 1.3. Calculate the annual profit to the company, without considering Mariam Dube's proposals. Ignore (5) the holding and ordering costs. 1.4. How much will the net annual saving from purchasing be if the company takes advantage of the 5% manufacturer's discount, as proposed by Mariam Dube