QUESTION FOUR (20 Marks) The eThekwini Municipality requests your advice on how to reduce inventory expenses for its coffee shop. The annual demand of fresh milk (boxes of 6 litres) =750 units, deliverd purchase cost = R35/units, Annual carrying cost percentage =25 percent, Order cost = R50/order. The lead time is 10 working days. Assuming 20 working days per month. 4.1 Determine the Economic Order Quantity (4 marks) 4.2. Determine the reorder point (4 marks) 4.3 Determine the average inventory (4 marks) 4.4 Suppose orders are placed only at review time. Find the optimal period and the optimal order quantity. (8 marks) Read the statement below and answer ALL five questions that follow: Material costs play a crucial role in determining the overall cost structure of an organization. Effective management of material costs involves a combination of strategic sourcing, risk management, supplier relationships, and continuous monitoring of market trends. Organizations that can adapt to fluctuations in material costs and proactively manage their supply chains are better positioned to maintain competitivene and financial health. You are managing the purchasing department of eThekwini Municipality, in KwaZulu Natal, Durban-South Africa. Answer the following questions focusing on how your position will assist in creating value to the Municipality in terms of cost reduction when buying its goods and services. QUESTION FOUR (20 Marks) The eThekwini Municipality requests your advice on how to reduce inventory expenses for its coffee shop. The annual demand of fresh milk (boxes of 6 litres) =750 units, deliverd purchase cost = R35/units, Annual carrying cost percentage =25 percent, Order cost = R50/order. The lead time is 10 working days. Assuming 20 working days per month. 4.1 Determine the Economic Order Quantity (4 marks) 4.2. Determine the reorder point (4 marks) 4.3 Determine the average inventory (4 marks) 4.4 Suppose orders are placed only at review time. Find the optimal period and the optimal order quantity. (8 marks) Read the statement below and answer ALL five questions that follow: Material costs play a crucial role in determining the overall cost structure of an organization. Effective management of material costs involves a combination of strategic sourcing, risk management, supplier relationships, and continuous monitoring of market trends. Organizations that can adapt to fluctuations in material costs and proactively manage their supply chains are better positioned to maintain competitivene and financial health. You are managing the purchasing department of eThekwini Municipality, in KwaZulu Natal, Durban-South Africa. Answer the following questions focusing on how your position will assist in creating value to the Municipality in terms of cost reduction when buying its goods and services