whole of question 5

Question 5 (10 Marks) Hollow manufactures a single product "Tube" during week days, Monday to Friday. Hollow purchase "Stretch", one of its raw materials from Sticky an outside supplier. Stretch cost R20 per unit, and Hollow need 680 units per week. Direct holding cost of the material amount to R1,50 per unit and the ordering cost is R75 per order. Cost of capital is 8% Hollow operate 50 weeks per annum. Sticky take 7 working days to deliver an order of Stretch to Hollow. Hollow requires a safety stock of 350 units of Stretch. Required. Calculate the following a) Economic order quantity for material b) Reorder point (6)