(4 marks) (b) Material Y is also used in the manufacture of Product Z and in several other products. The total annual requirement for Material Y is 120,000 litres, used evenly over each year. The costs of ordering stock and holding stock are as follows: Ordering (K45 per order Holding KO 30 per litre per annum A safety stock of 2,500 litres of Material 'Y' is held and the average time interval between placing an order for materials and having them delivered is 1-5 weeks. There are 50 weeks in a year. Required: Calculate for Material Y the: (i) Economic order quantity (ii) Reorder level (iii) Total annual cost of ordering stock;" (iv) Total annual cost of holding stock. L& (4 marks) (3 marks) 1200 A (3 marks) (3 marks)
(4 marks) (b) Material Y is also used in the manufacture of Product Z and in several other products. The total annual requirement for Material Y is 120,000 litres, used evenly over each year. The costs of ordering stock and holding stock are as follows: Ordering (K45 per order Holding KO 30 per litre per annum A safety stock of 2,500 litres of Material 'Y' is held and the average time interval between placing an order for materials and having them delivered is 1-5 weeks. There are 50 weeks in a year. Required: Calculate for Material Y the: (i) Economic order quantity (ii) Reorder level (iii) Total annual cost of ordering stock;" (iv) Total annual cost of holding stock. L& (4 marks) (3 marks) 1200 A (3 marks) (3 marks)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:(4 marks)
(b) Material Y is also used in the manufacture of Product Z and in several other
products. The total annual requirement for Material Y is 120,000 litres, used evenly over
each year.
The costs of ordering stock and holding stock are as follows:
Ordering (K45 per order
Holding KO 30 per litre per annum
A safety stock of 2,500 litres of Material 'Y' is held and the average time interval between
placing an order for materials and having them delivered is 1-5 weeks. There are 50
weeks in a year.
Required:
Calculate for Material Y the:
(i) Economic order quantity
(ii) Reorder level
(iii) Total annual cost of ordering stock;"
(iv) Total annual cost of holding stock.
L&
(4 marks)
(3 marks)
1200
A
(3 marks)
(3 marks)
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