Many manufacturing organisations hold raw material stocks. Required: (a) (b) (c) (d) List three examples of...

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Many manufacturing organisations hold raw material stocks. Required: (a) (b) (c) (d) List three examples of holding costs. List two examples of stockout costs. List two examples of ordering costs. List two documents used in recording materials movements. (e) (f) 3 marks 2 marks 2 marks 2 marks A manufacturing organization uses 20,000 kilograms (kg) of a raw material evenly over a period. The material is purchased for K250 per kg, the cost of placing an order with the supplier is K6,000 and the cost of holding one kg of the material in stock for the period is 15% of the purchase price. Required: Calculate the economic order quantity (EOQ) for the raw material (to the nearest kg). 5 marks Calculate the total holding costs of the raw material in the period if the order quantity is 3,000 kg and buffer stock is 1,000kg. 6 marks Many manufacturing organisations hold raw material stocks. Required: (a) (b) (c) (d) List three examples of holding costs. List two examples of stockout costs. List two examples of ordering costs. List two documents used in recording materials movements. (e) (f) 3 marks 2 marks 2 marks 2 marks A manufacturing organization uses 20,000 kilograms (kg) of a raw material evenly over a period. The material is purchased for K250 per kg, the cost of placing an order with the supplier is K6,000 and the cost of holding one kg of the material in stock for the period is 15% of the purchase price. Required: Calculate the economic order quantity (EOQ) for the raw material (to the nearest kg). 5 marks Calculate the total holding costs of the raw material in the period if the order quantity is 3,000 kg and buffer stock is 1,000kg. 6 marks

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