Required: 3.2.1 Calculate the economic order quantity for the company. Note: round off your answer to the nearest whole number. 3.2.2 Calculate the total ordering cost for the company. Note: Round off your calculations to the nearest whole number. 3.2.3 Calculate the reorder point for the company
Required: 3.2.1 Calculate the economic order quantity for the company. Note: round off your answer to the nearest whole number. 3.2.2 Calculate the total ordering cost for the company. Note: Round off your calculations to the nearest whole number. 3.2.3 Calculate the reorder point for the company
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter6: Statistical Inference
Section: Chapter Questions
Problem 29P: Carpetland salespersons average 8,000 per week in sales. Steve Contois, the firms vice president,...
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Transcribed Image Text:3.2 Sadida (Pty) Ltd sells different grades of cheese to the general public as well as to other retailers. The company hired
you as its management accountant two months ago. Recently, you have been tasked with instituting measures to
reduce the company's rapidly increasing costs. After some research, you have come to the realization that the
company does not make use of Economic Order Quantity (EOQ) and you believe that this will be a good place to start
your cost-reduction journey. You have therefore rounded up the following information regarding one of its products:
2 650 units
Weekly demand
Purchase price per unit
R180
Cost of placing an order
R230
Insurance
10% of the purchase price
R17 per unit
2 weeks
1 week's demand
Direct stockholding costs
Lead time
Safety inventory
Required:
3.2.1 Calculate the economic order quantity for the company. Note: round off your answer to the nearest whole number.
1
3.2.2 Calculate the total ordering cost for the company. Note: Round off your calculations to the nearest whole number.
3.2.3 Calculate the reorder point for the company
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