(20 marks) Question 5 from Page 180 5.1 The accountant for one of the PepsiCo factories...

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(20 marks) Question 5 from Page 180 5.1 The accountant for one of the PepsiCo factories in Palapye has provided you a list with six items in inventory along with their unit costs and annual demand in units. He has requested that you should assist him apply the ABC analysis to determine which item(s) should be carefully controlled using a quantitative inventory technique and which item(s) should (10 marks) not be closely controlled. Code XX1 B66 3CPO 33CP R2D2 RMS Unit Cost (R) 5.84 5.40 1.12 74.54 2.00 2.08 Annual Demand 1,200 1,110 896 1,104 1,110 961 5.2 In addition, this same factory shop uses 10 brackets per day during the year. The brackets are purchased from a supplier 90km away. The costs incurred include holding costs per bracket per year: R1.50, order cost per order: R18.75, Lead time is 2 days, working days per year is 250 days. What would be the economic order quantity? What will be the annual inventory holding costs. How many orders would be made each year? What would be the annual order cost? What is the time between orders and the reorder point (ROP)? (10 marks) inc (20 marks) Question 5 from Page 180 5.1 The accountant for one of the PepsiCo factories in Palapye has provided you a list with six items in inventory along with their unit costs and annual demand in units. He has requested that you should assist him apply the ABC analysis to determine which item(s) should be carefully controlled using a quantitative inventory technique and which item(s) should (10 marks) not be closely controlled. Code XX1 B66 3CPO 33CP R2D2 RMS Unit Cost (R) 5.84 5.40 1.12 74.54 2.00 2.08 Annual Demand 1,200 1,110 896 1,104 1,110 961 5.2 In addition, this same factory shop uses 10 brackets per day during the year. The brackets are purchased from a supplier 90km away. The costs incurred include holding costs per bracket per year: R1.50, order cost per order: R18.75, Lead time is 2 days, working days per year is 250 days. What would be the economic order quantity? What will be the annual inventory holding costs. How many orders would be made each year? What would be the annual order cost? What is the time between orders and the reorder point (ROP)? (10 marks) inc

Answer rating: 100% (QA)

Solution To determine the economic order quantity EOQ we need to calculate the total cost of holding and ordering inventory and find the point where t... View the full answer