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Sesi Frozen Pizza estimates to have annual sales of R1 250 000, at R25 per unit...

Sesi Frozen Pizza estimates to have annual sales of R1 250 000, at R25 per unit in 2018. The ordering cost for the ingredients is R250 per order and its carrying cost is R5 per unit per year. Sesi Frozen Pizza experience delays in delivery of its ingredients by 4 days. Management have decided to hold safety stock of 550 units.

a) Calculate the economic order quantity (EOQ) for Sesi Frozen Pizza

b) Calculate the re-order level for Sesi Frozen Pizza

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