Question: SECTION A - COMPULSORY QUESTION ONE Bunda Company is a distributor of air filters to retails stores. It buys its filters from several manufacturers. Filters

SECTION A - COMPULSORY QUESTION ONE Bunda Company is a distributor

SECTION A - COMPULSORY QUESTION ONE Bunda Company is a distributor of air filters to retails stores. It buys its filters from several manufacturers. Filters are ordered in batches of sizes of 1,000, and each order costs K40 to place. The unit price is K1.20 a filter, Demand from retail stores is 20,000 filters per month, and carrying cost per month is 10 percent of the price. Required (a) What is the optimal order quantity with respect to the batch sizes? (7 marks) (b) What is the total inventory cost for the month? (8 Marks) (c) What would be the optimal order quantity if the carrying cost were cut in half the cost a filter per month? (5 Marks) (d) What would be the optimal order quantity if ordering costs were reduced to K30 per order

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

QUESTION THREE Bunda Company is a distributor of air filters to retails stores. It buys its fitters from severa! manufacturers. Filters are ordered in batches of sizes of 1,000 , and each order costs...

Bostick Company is a distributor of air filters to retail stores. It buys its filters from several manufacturers. Filters are ordered in lot sizes of 1,000, and each order costs 4,000 to place....

QUESTION 4 EOQ Vostick Filter Company is a distributor of air filters to retail stores. It buys its filters from several manufacturers. Filters are ordered in lot sizes of 1,000, and each order costs...

reply fast Read the details given below to answer the question 13,14 and 15 (Marks 2.5 X 3 = 7.5) Guard filter Company is a distributor of air filters to retail stores. It buys its filters from...

3. Vostick Filter Company is a distributor of air filters to retail stores. It buys its filters from several manufacturers. Filters are ordered in lot sizes of 1,000, and each order costs $40 to...

Vostick Filter Company is a distributor of air filters to retail stores. It buys its filters from several manufacturers. Filters are ordered in lot sizes of 1,000, and each order costs $40 to place....

Please only answer question one ONLY! QUESTION ONE STATES: Question 1: Based on the data in the case and after making logical assumptions make an estimate of the Revenues, Costs and Profits of the...

In the Intro to Purchasing and Supply Chain reading, Page 6, Figure 1-2, there is a comparison of Traditional Purchasing versus the Current Outlook. Provide three reasons why the Current Outlook is...

sources. Further, oods and hurricanes have damaged or completely shut down water treatment facilities in some cities. Problems like these have led to rumors of possible epidemics of such dread...

On January 1, 2013, Janus Company issued bonds with a face value of $200,000, a stated rate of interest of 6 percent, and a 10-year term to maturity. Interest is payable in cash on December 31 of...

Preparing Standardized Financial Statements Prepare the 2007 combined common-size, commonbase year balance sheet for Just Dew It. JUST DEW IT CORPORATION 2006 and 2007 Balance Sheets Liabilities and...

In a sales force compensation plan, an example of indirect financial compensation is: Salary payment. Paid vacation. Field supervision. Christmas cash bonus. Air - conditioned office.

On 1 March 2007 DB Limited issued R560 000 15% debentures at R98. The debentures were to be redeemed at par in four equal annual payments starting 28 February 2010. Required: Journalise the above...