Questientwo a) Explain costs associated with hoiding stocks in an organizationel context 5 marks) (b) The following data is available in respect of material x. Budgeted consumption: Maximum Minimum Average 300 units per month 50 units per month 150 units per month Annual . 1,200 units Lead time for suppliers is estimated as maximum 4 months, minimum 2 months. Storage costs are 25% or the annual stock value. Gra ering cois are K20, COO per crder Price per unit of material is K3, 200. Required Compute ti) The EO0 lii)The re-order level (ii) The maximum stock level fi) The minimurn stock level (5 marks) 2,marks) z miarkS (2 marks) (2 marks) (v)The average stock level. Total 20 marks)
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