Question: c. Upon hearing that Iman is considering manufacturing the jars at her place, the supplier has offered Iman if she purchases the jars in lots

c. Upon hearing that Iman is considering

c. Upon hearing that Iman is considering manufacturing the jars at her place, the supplier has offered Iman if she purchases the jars in lots of 1,000 the price will drop from RM15 to RM14.30 per unit but this time lead time will increase to 5 days for this larger lot size. i. Calculate the total annual inventory cost (including purchase cost) if Iman buys the jars in lot size of 1,000 at RM14.30 each. (5 marks) ii. If Iman agreed to purchase in 1,000 units of jars, determine the new reorder point (ROP). (2 marks) iii. What would you advise Iman to do if she had the option of buying the jars for RM15 a piece or producing them in-house for RM14.80 and taking advantage of the discount? (4 marks) c. Upon hearing that Iman is considering manufacturing the jars at her place, the supplier has offered Iman if she purchases the jars in lots of 1,000 the price will drop from RM15 to RM14.30 per unit but this time lead time will increase to 5 days for this larger lot size. i. Calculate the total annual inventory cost (including purchase cost) if Iman buys the jars in lot size of 1,000 at RM14.30 each. (5 marks) ii. If Iman agreed to purchase in 1,000 units of jars, determine the new reorder point (ROP). (2 marks) iii. What would you advise Iman to do if she had the option of buying the jars for RM15 a piece or producing them in-house for RM14.80 and taking advantage of the discount? (4 marks)

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