Jumbo Ltd produces tables with a steady monthly demand of 25 000 units. Tables require a component that is acquired from the supplier at R60 per unit. The cost of placing an order is R12 per order and the holding cost is 12% of the unit purchase price. (5 marks)

NB: Round off to the next whole number

Required: Number of orders per year based on the economic order quantity.

1.2 Information: Rambo Producers has the following sales forecast for Line 1 Product for the first two months of 2022 (5 marks)

January 70 000 units

February 90 000 units

Rambo Producers maintains an inventory, at the end of the month, equal to 21% of the budgeted sales of the following month.

Required: Determine the required number of units that should be produced during January 2022.

Answer rating: 100% (QA)

1 Number of orders per year based on the economic order quantity The economic order quantity EOQ can ... View the full answer