Question

1.3       Spares for you sells spares for the motor and taxi industry. The company runs a...

1.3       Spares for you sells spares for the motor and taxi industry. The company runs a mail-order business for taxi headlights. Annual demand for the headlights is 8 000 units. The annual holding cost per unit is R300 and the cost to place an order is R80. Calculate the EOQ.      

1.4       Study the information below and answer the questions that follow:

Normal usage or average requirement

800 units per day

Maximum usage

1 000 units per day

Minimum usage

600 units per day

Re-order period

One month (30 days)

Time required to receive emergency supplies

5 days

Calculate the following:

1.4.1    Ordering point                                                                                                                   

1.4.2    Minimum limit/level                                                                                                         

1.4.3    Danger level                                                                                                                         

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