Joy Bionic's Ltd. (Bionic's) among other things sells robot kits and robotic systems. One of the replacement items that it holds in inventory is a "robocontroller". Bionic's sells 1,125 robocontrollers annually. The cost to place an order for robocontrollers is $4.00, while the holding cost is 14.4% of the selling price. Joy purchases and takes delivery of the robocontroller from a supplier for an all in cost of $55. Joy operates 7 days a week working 50 weeks per year. The selling price of the robocontroller is $100. If a sale cannot be made because there are no controllers on hand Joy forgoes the contribution margin on the robocontroller. Lead time on orders is 1 week. Weekly Bionic's sales have been summarized and statistically analyzed. The sales profile is as follows: 

Required Calculate the following: show all calculation as your proof. a) EOQ (2 Marks) b) Re-order point (2 Marks) c) Number of orders that would be placed in a year (2 Marks) d) Total Relevant Cost (2 Marks) e) Calculate the appropriate level of safety stock (8 Marks)

Answer rating: 100% (QA)

a EOQ Given Annual Usage 1125 controllers Ordering Cost 4 per order Holding Cost 144 of selling pric... View the full answer