Define inventory management and examine its classification based on its in the supply chain.

Question 2

Using the data in the below solve the questions that follow

Type of Cost	Values (per year)
Cost of capital	8.50%
Cost due to breakage	6.50%
Rent paid toward physical space for storage	3.50%
Premium paid to insecure inventory	0.25%
Tax	1.00%

1. Inventory carrying cost
2. The annual carrying cost for 15 items that cost R300
3. The total annual carrying cost for 15items that cost R300 per item.
4. The total carrying cost for 15 items that costR300 per unit and are held in inventory for a period of 2 years

Question3

The Johannesburg Cardiology centre in Gauteng buys 25 000 stents each year from its suppliers in Germany. Each stent costs R22500 and the carrying cost is 26% of the value of the average inventory of stents per year. If the ordering cost is R4050 per order, determine the economic order quantity for stents. Also determine the number of the orders and the minimum total inventory costs.

Question4

Examine the following inventory control systems using relevant examples

4 .1 Fixed order quantity system

4.2 Periodic review system

Question 5

Explain the functions of a MRP system and identify the inputs into the system, consider the following product structure. Each A consists of 2Bs and 1C. Each B consists of 3Ds and 2Es.

Each C consist of 2Ds and 2ES. Draw the BOM structure. How many Ds are necessary to produce 400 As

Question 6

The following table presents ten items with their corresponding unit cost and annual demand for each of the items. Using the information in the table classify the items into classes A, B and C

Item	Cost	Demand
1	7	38,000.00
2	14	3,000.00
3	20	300
4	10	957
5	21	4,800.00