QUESTION 1 Use the information provided below to answer the following questions. INFORMATION [10 MARKS]...
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QUESTION 1 Use the information provided below to answer the following questions. INFORMATION [10 MARKS] TCM Diagnostics Inc. procures its annual requirement of 180 000 units of a medical device in 6 installments. Each unit costs R500 and the ordering cost is R5 000. The inventory holding cost is estimated at 10% of unit value. Required: 1.1. Compute the economic order quantity of the product. 1.2. Compute the total annual cost of the existing inventory policy. 1.3. How much money can TCM Inc. save by replacing the existing inventory policy with the economic order quantity (EOQ) model? (3) (3) (4)
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