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Octopus Company provides you with the following information regarding its inventory Maximum lead time 5 weeks Minimum lead time 2 weeks Average delivery time 3 weeks Lost interest rate 3% Insurance 2% Annual demand 250 000 Cost price per unit R20 per unit Ordering cost R30 per order Maximum weekly usage 4 000 units Minimum weekly usage 3 000 units Required Calculate the following: (a) EOQ (b) Number of orders per year (c) Reorder level (d) Total ordering cost (e) Minimum inventory level (f) Maximum inventory

Octopus Company provides you with the following information regarding its inventory Maximum lead time 5 weeks Minimum lead time 2 weeks Average delivery time 3 weeks Lost interest rate 3% Insurance 2% Annual demand 250 000 Cost price per unit R20 per unit Ordering cost R30 per order Maximum weekly usage 4 000 units Minimum weekly usage 3 000 units Required Calculate the following: (a) EOQ (b) Number of orders per year (c) Reorder level (d) Total ordering cost (e) Minimum inventory level (f) Maximum inventory

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please assist with D, E and F urgently
Octopus Company provides you with the following information regarding its inventory Maximum lead time 5 weeks Minimum lead time 2 weeks Average delivery time 3 weeks Lost interest rate 3% Insurance 2% Annual demand 250 000 Cost price per unit R20 per unit Ordering cost R30 per order Maximum weekly usage 4 000 units Minimum weekly usage 3 000 units Required Calculate the following: (a) EOQ (b) Number of orders per year (c) Reorder level (d) Total ordering cost (e) Minimum inventory level (f) Maximum inventory
Transcribed Image Text:Octopus Company provides you with the following information regarding its inventory Maximum lead time 5 weeks Minimum lead time 2 weeks Average delivery time 3 weeks Lost interest rate 3% Insurance 2% Annual demand 250 000 Cost price per unit R20 per unit Ordering cost R30 per order Maximum weekly usage 4 000 units Minimum weekly usage 3 000 units Required Calculate the following: (a) EOQ (b) Number of orders per year (c) Reorder level (d) Total ordering cost (e) Minimum inventory level (f) Maximum inventory
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