Octopus Company provides you with the following information regarding its inventory: Maximum lead time 5 weeks Minimum lead time 2 weeks Normal lead time 3 weeks Normal weekly usage 4 000 units Interest rate 5% Cost price per unit R20 per unit Inventory carrying cost R7 per unit Ordering cost R30 per order Maximum weekly usage 4 000 units Minimum weekly usage 3 000 units Required: a).Calculate EOQ b). safety stock c). total ordering cost
Octopus Company provides you with the following information regarding its inventory:
Maximum lead time 5 weeks
Minimum lead time 2 weeks
Normal lead time 3 weeks
Normal weekly usage 4 000 units
Interest rate 5%
Cost price per unit R20 per unit
Inventory carrying cost R7 per unit
Ordering cost R30 per order
Maximum weekly usage 4 000 units
Minimum weekly usage 3 000 units
Required:
a).Calculate EOQ
b). safety stock
c). total ordering cost
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