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Drink-sum-more Pty (Ltd) is a privately-owned business that markets and distributes a range of healthy...

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Accounting

Drink-sum-more Pty (Ltd) is a privately-owned business that markets and distributes a range of healthy soft drinks made from natural ingredients. They purchase their 550ml bottles from a local supplier. Drink-sum-more requires 243 bottles to meet monthly demand. The cost of placing an order is R50. The inventory carrying cost is estimated to be R25 per unit per annum.

REQUIRED:

a) Calculate the economic order quantity. (4)

b) Calculate the number of orders to meet the annual demand. (2)

c) Calculate the annual ordering cost. (2)

d) Calculate the annual carrying cost. (2)

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