QUESTION $5(20$ Marks$)$

Barloworld Logistics is a South African$-$based supply chain and logistics company that provides integrated solutions to

optimise the flow of goods and materials for businesses across various industries. Part of the larger Barloworld Group,

Barloworld Logistics operates across multiple African countries, as well as in parts of the Middle East, Europe, and Asia.

The following data has been provided relating to one of the essential supplies that are utilised for Barloworld Logistics

operations. Usage is approximately $10$ brackets per day during the year. The brackets are purchased from a supplier

$90$km away and the costs incurred include holding costs per bracket per year of R$1\mathrm{.}50,$ and order cost per order of

R$18\mathrm{.}75.$ The lead time is $2$ days and working days per year is $250$ days. Advise the management on the following

inventory management issues.

$5\mathrm{.}1$ Using the provided information determine the following.

$-$ Economic order quantity.

$-$ The annual inventory holding costs.

$-$ How many orders would be made each year?

$-$ What would be the annual order cost?

$-$ What is the time between orders and the reorder point $($ROP$)?$

$(14$ Marks$)$

$5\mathrm{.}2$ In the context of the organisation, are you of the view it should hold inventory? Substantiate your

response with relevant examples.