Question: NB Enterprises Ltd is an established manufacturing company using material EWR65 in the manufacture of its product. It aims at controlling the capital it

NB Enterprises Ltd is an established manufacturing company using material EWR65 in

NB Enterprises Ltd is an established manufacturing company using material EWR65 in the manufacture of its product. It aims at controlling the capital it invests in inventories of material EWR65. For this purpose, it has determined that Its annual requirements of material EWR65 is 3,600 units whose estimated cost of holding a unit per year is K4. The ordering cost incurred by NBE each time it places an order is K3,200. In addition, the following information is also available to you about material EWR65: Maximum consumption per week is 300 units of material EWR65 Minimum consumption is 50 units of EWR65 per week Maximum lead time 4 weeks Minimum lead time is 2 weeks per week Required (a) Calculate the EOQ for the EBE Ltd (b) How many orders will NBE place in a year? (c) Calculate the total cost NBE Ltd will incur for keeping the inventories of EWR65 (d) Calculate the following: (i) Reorder level (ii) Maximum stock level (ii) Minimum stock level (e) State 6 holding costs NBE Ltd will incur in holding inventories of EWR65

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