Use the following information for questions 10 and 11. Stephen owns an

importing wholesaler selling tilapia fish fillets that are imported from Uganda to

South Africa. Recently Stephen has seen demand for the imported fillets soar as

the local market demand for the fish has grown considerably. He has, however,

been experiencing what he feels are frequent stock-outs and is considering

keeping safety stock to avoid this in future. So far Stephen has used his

experiences to construct a probability distribution of demand in an average lead

time: Demand in lead time Probability 500 0,10 1000 0,40 1100 0,30 1200 0,20

Sum 1,00 One fillet (one unit) sells for R20, while it costs R10. Stephen has

estimated his carrying cost per unit at R2, while his order costs per order is

R1000. His business usually sells 25 000 fillets per year. Required for question 10:

Using the above information, determine the EOQ for Stephens's business.

A. 1000 units

B. 5000 units

C. 20 000 units

D. 25 000 units

Using the above information (in question 10), determine how much safety stock

Stephen should hold for his business. [Note the mark allocation for this question

is 3 marks]

A. 0 units

B. 80 units

C. 180 units

D. 260 units