Question: ULTK ltd uses the EOQ inventory management model and and purchases 6 4 0 0 0 units of raw materials per year. The purchase price
ULTK ltd uses the EOQ inventory management model and and purchases units of raw materials per year. The purchase price of the raw materials is R per unit The cost holding one units in inventory is R per year The cost of reordering and taking delivery is R per order regardless of the size of the order experience has shown that the supplier of the raw material can be unreliable and that the delivery period can range between one week and tree weeks If the company wants to hold enough raw material to ensure that it never runs out calculate the lowest inventory level at which raw material should be recorded. period to days. it is expected that on average of customers will take the discount and pay within days, of customers will pay after days. and the rest of the customers will not change their payment behavior. OSP inc charge per annum on its overdraft facility. Determine the net benefit cost of the proposed changes in the trade receivable policy
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