Questions:

$2\mathrm{.}1$ Based on the case study and relevant theory and practical examples, describe the role played

by the following in inventory management and the entire supply chain:

$2\mathrm{.}1\mathrm{.}1\mathrm{.}1$ Cycle inventory

$2\mathrm{.}1\mathrm{.}1\mathrm{.}2$ Safety inventory

$2\mathrm{.}1\mathrm{.}1\mathrm{.}3$ Information technology

$(9$ marks$)$

$2\mathrm{.}2$ Identify and explain the inventory replenishment policy used by Flame Electrical. How is this

different from using EOQ?

$2\mathrm{.}3$ Flame Electrical expects to sell approximately $9600$ hospital lamps of a certain size and design

the following year. Annual carrying cost is R$16$ per lamp, and the ordering cost is R$75$ per

order. The company operates $288$ days a year.

Assuming that Flame Electrical were to use the EOQ to replenish their inventory answer the

following questions and show your workings

$2\mathrm{.}3\mathrm{.}1$ Calculate the EOQ

$2\mathrm{.}3\mathrm{.}2$ How many times per year would the company reorder if the EOQ is ordered?

$2\mathrm{.}3\mathrm{.}3$ What is the length of an order cycle if the EOQ is ordered?

$2\mathrm{.}3\mathrm{.}4$ What is the total cost of this order?