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Chapter 11 - Inventory Use the following information to answer questions 6 - 12 notes in order to receive partial marks, you can show your work in question 12). BIKO is a bike retailer located in the outskirts of Toronto BIKO purchases bikes from VMX in orders of 250 bikes which is the current economic order quantity. VMX is now offering the following bulk discounts to its customers 2% discount on orders above 200 unts .4% discount on orders above 300 units . 6% discount on orders above 400 units BIKO is wondering it the model is still the most economical and whether increasing the order vize would actually be more beneficial Following information is relevant to forming the decision The store sels 50 bikes per day and is open 200 days per year. - Ordering cost is $100 per order Annual holding cost is comprised of the following 5% interest costs per unit calculated using the net purchase price Warehousing cost of $6 per unit Purchase price is $200 per unit before discount What is the demand variable "D" for calculating the EOD? (2 marks) 18.250 bikes per year 200 bikes per day 10,000 bikes per year 833 bikes per month QUESTION 7 What is the annual holding cost "H" at the 6% discount level? (2 Marks) $15.4 $9.4 $188 $203.4 QUESTION 8 What is the feasible EOQ for this problem with the new discount structure? (3 marks) 360 358 355 250 QUESTION 9 What is the total cost of the feasible EOQ (rounded to nearest dollar)? (3 marks) $1,885,580 $2,100,000 $1,925,585 $1,965,975 QUESTION 10 What order quantity would you recommend to BIKO to minimize the total cost of ordering and holding costs. (3 marks) 250 358 OOOO 400 300 QUESTION 11 The lead-time for each order is 5 days and BIKO wants to maintain a minimum of 25 bikes in Inventory at all times (safety stock). At what inventory level should the BIKO place the order? (3 marks 250 275 400 425