QUESTION 3 [25]

Khuzawayo Construction a local sub-contractor expects to use 19 675 pockets of cement for 2021. Carrying costs are R 6.25 per unit and order costs are R 43.55. The organization works 315 Days per year. Determine:

3.1.1 The Economic Order Quantity (EOQ) (4)

3.1.2 The number of orders per year (3)

3.1.3 The length of the order cycle. (3)

3.1.4 The Total Cost of the inventory. (5)

3.2 Using the table below, compile an ABC analysis: (5)

3.3 Is inventory an asset or a liability? Justify your answer. (5)