Question: Question 1 (22 marks) a) What is economic order quantity (EOQ)? (2 marks) b) Zhing Zhong Namibia sells 20000 tyres a year. The holding costs

Question 1 (22 marks) a) What is economic order quantity (EOQ)? (2 marks) b) Zhing Zhong Namibia sells 20000 tyres a year. The holding costs are estimated at N $50 per tyre per year. The ordering costs are N $100 per order. The business works 275 days per year. With the information above calculate: i) the optimal economic order quantity (EOQ) (4 marks) ii) the number of orders per year (2 marks) iii) the length of the ordering cycle (3marks) iv) the total annual inventory costs (4 marks) v) if the holding costs increase to N 60 per bag what will the total annual inventory costs amount to? (7 marks) TUTORIAL LETTER OPERATIONS MANAGEMENT OPM6115 Question 2 (12 marks) a) What is production waste? (2? marks) b) Name and briefly explain any five costs incurred because of waste. (10 marks) Question 3 (17 marks) a) What is the aggregate planning? (1 mark) b) Name 2 the benefits of capacity planning ( 4 marks) c) With reference to aggregate planning, name 6 costs of production that are subtleot easily visible. (12 marks)

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