Question

QUESTION Z (10 marks; 18 minutes) Rudd Company uses 40 000 micro-chips each year in its p roduction of the tactical binoculars working day, however, some days for the defence force. An average of 140 units are used per th ey use up to 150 units. The cost of placing an order is R75 and the cost of holding one unit of inventory for one year is R8, Currently Rudd places 20 orders of 2 000 units per order Required: 7.1 Calculate the total cost of Rudd's current inventory policy. 7.2 Calculate the Economic Order Quantity. 7.3 Calculate the total costs for the Economic Order Quantity. 7.4 How much money does the EoQ Policy save the company over the policy of purchasing 2 000 micro-chips per order? Calculate the re-order point, assuming the lead time is 3 days. Calculate the safety stock. Calculate the re-order point with safety stock 7.5 7.6 7.7 4.

Answer 1

7.7 Reorder point with safty stock = 480 units

Total Cost of Rudd's Curint inveoy Polia 9s0D ordle 66 ホ 40100 0 366 x s 3464346R.3S oySOD 2572 x Maximum lead hme LM