SECTION B: MEDIUM ANSWER QUESTIONS

TASK $3$

MARKS $20$

A Retail Inventory Decision Support System

You are the proprietor of a small retail establishment that offers sewing machines. You have established a Decision Support System to enhance your inventory management and make data$-$driven decisions $($DSS$).$ To provide suggestions on inventory replenishment and pricing, the DSS examines sales information, inventory levels, and market trends.

Page $2$ of $5$

You are given the recommendation shown below based on the information from your DSS:

Product: Sewing Machines

Current Inventory: $50$ Machines

Increasing sales trends

Demand in the market is high.

Assume the selling price of each sewing machine is R$15000.$

And sales are projected to increase by $50\%$ due to the market demand.

The DSS advises placing a new purchase for $200$ sewing machines to accommodate the expected demand. But due to rising manufacturing costs, the supplier raised the price of sewing machines by $20\%.$ Each sewing machine previously cost R$10000.$

Required:

$3\mathrm{.}1$ Should you reorder sewing machines at the new price per the DSS advice? Justify your answer $($Round off any calculations to the nearest whole number$).(20$ Marks$)$