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Felicia Textile manufacturers various type of ready-made lace kurung. One of the most popular lace is Sulamas Lace which is imported from Vietnam. Budgeted




Felicia Textile manufacturers various type of ready-made lace kurung. One of the most popular lace is Sulamas Lace which is imported from Vietnam. Budgeted average demand for Sulamas Lace is 722 meter per week and the production is maintained for 50 weeks per year. The maximum usage is 600 meters, and the minimum is 400 meters. On average, the order takes around 2 to 4 weeks to be arrived after the order is made. The following cost were incurred by the business in ordering and handling the material receipt: 1. Cost of handling the order incurred by purchasing department is RM 150 per order. 2. The business needs to rent additional space for storing the Sulamas Lace at the rate of RM 3.40 per meter. 3. The freight and transportation cost per order is RM 90. 4. The material is also being insured at the cost of RM 1.40 per meter. Required: Calculate the following: (i) Annual Demand for the year (ii) Economic Order Quantity (EOQ) (iii) Number of order in a year (iv) Total cost to make order at the EOQ level. (v) Minimum stock level for the year

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