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ACC502 - Tutorial 10 Semester 2, 2025 Discussion Questions 1. Using your own words, explain the meaning of supply chain management (SCM), and why some organizations see SCM as valuable. 2. Explain how the concepts B2B and B2C relate to supply chains. 3. What is the economic order quantity model? What can it be used for? 4. Under EOQ approaches, order costs can be minimized by placing large, infrequent orders for inventory. However, under JIT, inventory-related costs are reduced by ordering frequently and in small quantities. Can you explain why both statements are correct? 5. Comment on this statement: JIT doesn't make sense. Companies that implement JIT are putting themselves in danger of downtime and stock-outs. Exercises 6. Economic order quantity, equation approach; effects of JIT purchasing: manufacturer Rally Communications Company manufactures glass flores used In the communications incustry. The company's materials and barts manager is currently revising the inventory ordering policy for XL-20. one of the chemicals used in the production process. The chemical is puresee in 10-kilogram canisters lor $95 cach. The lim uses 4800 canisters per year The accountant estimates that the Incremental costs of ordering and receding XL-20 are $150 per order The anna cost of staring XL-20 is $4 per canister. Required: 1. Use the EDG formula to color nine l'c optimal order quanlily for XL-20. 2. What is one total annual cost of ordering and storing XL-20 at the economic order quantity? How many orders will be placed per year? 4. Rally's accountant, F-unk Mallard. "ecently uttericed a seminar on JIT purchasing. Afterwards. ne analysed the cost of storing XL 20, Including the cost of wasted space and Inefficiency. He was shocked to find that the real annual carrying cost was $20 per caniste : Mallard then met with Doug Kaplan, Rally's purchasing manager. Togeller they contacted Cremical Industries, the supplie- of XL-20, about a JIT purchasing arrangement. Alter some visession and negotiation, Kaplan concluded that we cost of placing an order for XI -20 could be reduced to just $30. (a) Ca culate the new EO-O for XL-20. It) I low many orders will be placed per year