Pegasus Engineering Plc uses circuit boards in its electronic hand tools that it manufactures, and this usage is relatively constant throughout the year. The firm demand for the component is 5 000 unit per year. These circuit boards are purchased from a supplier for $30 each, and the lead time is two (2) days. The holding cost per unit per year is 5% of the unit cost and the ordering cost per order is $30. There are 250 working days per year. Required: A. i. Calculate the economic order quantity (EOQ) ii. Given the EOQ, determine the total annual inventory cost. iii. Outline three assumptions of the EOQ Model (3 marks) (3 marks) (3 marks)

Pegasus Engineering Plc uses circuit boards in its electronic hand tools that it manufactures, and this usage is relatively constant throughout the year. The firm demand for the component is 5000 unit per year. These circuit boards are purchased from a supplier for $30 each, and the lead time is two (2) days. The holding cost per unit per year is 5% of the unit cost and the ordering cost per order is $30. There are 250 working days per year. Required: A. i. Calculate the economic order quantity (EOQ) ii. Given the EOQ, determine the total annual inventory cost. iii. Outline three assumptions of the EOQ Model