Turblow Ltd is a manufacturer of industrial fan. The finance manager is

concerned about the firm's management of working capital.

a$)$ The average collection period and average payment period are $33$ days

and $30$ days respectively. The firm turns over its inventory $15$ times

each year $($assume $365$ days year$),$ and currently has annual sales of

$$105$ million.

$($i$)$ Calculate the firm's operating cycle and cash conversion cycle,

correct to $1$ decimal place.

$($ii$)$ Determine the amount of resources needed to support the firm's

cash conversion cycle.

b$)$ Turblow Ltd purchases $150000$ units per year of a component used in

industrial fan production. The cost per order is $$25,$ while the carry cost

is $$12$ per unit per year.

$($i$)$ Calculate the economic order quantity.

$($ii$)$ Using your answer in $($i$),$ calculate the ordering cost, carrying cost

and total inventory cost.

c$)$ Suppose Turblow Ltd operates a $250$ days per year, and maintains a

minimum inventory level of $200$ units of safety stock. If the lead time to

receive orders of the component is $4$ days, calculate the reorder point.