Total Carrying Cost for Vietnamese rice papers. Economic Order Quantity (EOQ) for Vietnamese rice papers. The total cost to place order of Vietnamese rice papers at the EOQ. Maximum stock level of Vietnamese rice papers for the year. Minimum stock level of Vietnamese rice papers for the year
C: CASE STUDY 1
Hetty’s Cakes & Rolls Enterprise (HCRE) is famous for its vegetable Vietnamese rice paper rolls, especially for vegans in Kota Kinabalu area. The vegetable Vietnamese rice paper rolls are made of rice papers which HCRE purchases directly from a supplier in Vietnam at RM20 per pack. The monthly demand for the rice papers is estimated at 2,500 packs.
The delivery cost is RM450 per order. The administrative cost for ordering is RM15 per order. The storage cost is RM2.50 per pack, and the insurance cost is at 5% of inventory value.
The maximum and minimum usage of the rice paper is 300 packs and 150 packs, respectively. The delivery made from the supplier will take as long as 4 weeks and the shortest time expected is 2 weeks.
Miss Hetty, the manager, is interested to monitor the stock level of the rice paper in the store.
Required:
Calculate the following:
- Total Carrying Cost for Vietnamese rice papers.
- Economic Order Quantity (EOQ) for Vietnamese rice papers.
- The total cost to place order of Vietnamese rice papers at the EOQ.
- Maximum stock level of Vietnamese rice papers for the year.
- Minimum stock level of Vietnamese rice papers for the year
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