Question: Given an inventory system where Yearly demand = 120 units Ordering cost = Sh. 45 Price per unit = Sh. 200 Annual carrying cost =

Given an inventory system where

Yearly demand = 120 units

Ordering cost = Sh. 45

Price per unit = Sh. 200

Annual carrying cost = 24% of the unit cost

i.Determine the economic order quantity(2 marks)

ii.The supplier offers a 1% discount on the unit price if the items are purchased in lots of 100 at a time. Should the management accept the offer?(4 marks)

iii.Determine the minimum percentage discount that will make the offer attractive? (4 marks

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