QUESTION 3: [34 MARKS] 3.1. Thomas Gaga is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest moving inventory item has a demand of 6 000 units per year. The cost of each unit is R100 and the inventory carrying cost is R10 per unit per year. The average ordering cost is R30 per order. It takes about 5 days for an order to arrive. This is a corporate operation and there are 250 working days per year. a) What is the optimal order quantity? (2) b) What is the optimal number of orders placed per year? (2) (2) c) What is the optimal number of days between any two orders? d) What is the reorder point? (2) e) What is the total annual cost of ordering inventory? (2) f) What is the total annual cost of holding inventory? (2) g) Compute the total annual inventory cost. (2) BPJ1221/1021 PAGE 4 OF 5 3.2. Kleen Carpet (Pty) Ltd cleaned 65 rugs in October 2015, consuming the following resources: Input Cost Labour 520 hours at R13 per hour Solvent 100 litres at R5 per litre Machine Rental 20 days at R50 per day a) What is the labour productivity per Rand? b) Calculate the productivity. (2) 3.3. Casey manufactures soccer balls. With recent increases in his costs, he has a newfound interest in efficiency. Eric is interested in determining the productivity of his organization. He would like to know if his organization is maintaining the manufacturing average of 3% increase in productivity. He has the following data representing a month from last year and an equivalent month this year: Last Year This Year 1000 1.000 Units produced Labour (hours) 300 275 Resin (kg) 50 45 Capital invested (R) 10 000 11.000 Energy (BTU) 3.000 2850 Calculate the productivity for each input and determine the productivity percentage change for each category. In addition, draw suitable conclusions for each category. (16)