Q1 (a) Describe the relationship between ordering cost and setup cost. (3 marks) (b) Explain TWO (2) assumptions of the Economic Order Quantity (EOQ) model. (4 marks) (C) Innovex Computing manufactures an inexpensive audio card (Audio Max) for assembly into several models of its microcomputers. The annual demand for this part is 100,000 units. The annual inventory carrying cost is RM5 per unit and the cost of preparing an order and making production setup for the order is RM750. The company operates 250 days per year. The machine used to manufacture this part has a production rate of 2,000 units per day. Calculate: Optimum lot size. (4 marks) (ii) Expected number of orders. (4 marks) (iii) Average inventory. (5 marks) Q1 (a) Describe the relationship between ordering cost and setup cost. (3 marks) (b) Explain TWO (2) assumptions of the Economic Order Quantity (EOQ) model. (4 marks) (C) Innovex Computing manufactures an inexpensive audio card (Audio Max) for assembly into several models of its microcomputers. The annual demand for this part is 100,000 units. The annual inventory carrying cost is RM5 per unit and the cost of preparing an order and making production setup for the order is RM750. The company operates 250 days per year. The machine used to manufacture this part has a production rate of 2,000 units per day. Calculate: Optimum lot size. (4 marks) (ii) Expected number of orders. (4 marks) (iii) Average inventory