1. Makalani Trade buys fertiliser in 20kg bags which it resellsto their clients. The annual usage is 4950 bags, set-up(ordering)cost is 7$ per bag and the carrying/holding costs are 25$ per year.They work for 260 days per year
Determine:
i. the economic order quantity
ii. the average numbefr of bags on hand
iii. the number of orders per year
iv. the length of the ordering cycle
v. the total annual inventory costs
vi. if the ordering costs increase to $8.50, what will theeffect be on the total annual inventory costs?
2. A Tiger Wheel and Tyre franchise has forecast that it willsell 28800 4x4 tyres during the next year. the annual holding costsis expected to be $48 and ordering cost $225. the franchiseoperates 288 days per year. Task:
a. Determine the optimal EOQ
b. Determine the number of times that the franchise will have toreoder per year.
c. Determine the length of the order cycle
d. Determine the total annual cost.