Question: QUESTION 5 Takex Laundry is a self service laundry store located in Perak. The annual demand of detergent is 500 bottles, each with a value

QUESTION 5 Takex Laundry is a self service laundry store located in Perak. The annual demand of detergent is 500 bottles, each with a value of RM60. The cost to process an order is RM5 and RM8 is needed for labor to inspect the quantity and quality of goods. The inventory carrying cost is estimated to be 20% of the detergent value. a) Compute the optimal order quantity. b) What would the total inventory costs be? CONFIDENTIAL CONFIDENTIAL EM/FEB 2021/MEM375 c) If the carrying cost drops in half, compute the optimal order quantity, the optimal number of orders per year and the new total inventory cost. How much would the company save compared to current policy in QUESTION 5(b)? (7 marks)

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