QUESTION ONE $[20]$

A salon shampoo supplier presents the following data in respect of their purchases:

Annual demand $200000$ units

Maximum daily requirement $1500$ units

Average daily requirement $1050$ units

Carrying cost R $1,50$ per unit

Ordering cost R $40$ per order

Lead time $12$ days

Time needed to acquire emergency supplies $3$ days

NB: Assume that sales are even throughout the year.

$1\mathrm{.}1\mathrm{.}1$ Determine the economic order quantity $($EOQ$).(5)$

$1\mathrm{.}1\mathrm{.}2$ Determine the ordering point. $(5)$

$1\mathrm{.}1\mathrm{.}3$ Calculate the danger level. $(5)$

$1\mathrm{.}1\mathrm{.}4$ Discuss the assumptions made by the EOQ model. $(5)$