Question: A. Ayu Katek Sdn. Bhd. is a raw material distributor to the cosmetic companies operated in Kuala Lumpur. SQL3PH is among the highest demand raw

A. Ayu Katek Sdn. Bhd. is a raw material

A. Ayu Katek Sdn. Bhd. is a raw material distributor to the cosmetic companies operated in Kuala Lumpur. SQL3PH is among the highest demand raw materials with average monthly sales of 5000 kg. Purchasing cost of this material is RM100/kg and holding cost is estimated 5% of the purchasing cost. The current practice of the company is by ordering 500kg in every purchase with an average ordering cost of RM30 per order. It takes 3 days for the order to arrive. The company works 25 days a month. i. Determine the inventory total cost with the current ordering practice. (2 marks) ii. Analyze the given information and subsequently propose an economic ordering quantity for this material. Calculate also the percentage of inventory cost saving with the new ordering quantity. (4 marks) iii. Determine the minimum inventory level before making a new order. (1 mark) iv. Sketch two inventory cycles for this case and label the maximum quantity, lead time, cycle time between order and usage rate

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