Page 119 - F2 - MA Integrated Workbook STUDENT 2018-19
P. 119
Accounting for materials
Test your understanding 4
o
EOQ = 2 × C × D
C h
EOQ = [2 × $15 × 300 × 25] = 1,500 units
$0.10
Test your understanding 5
Maximum = re-order level + re-order quantity – (minimum usage × minimum
lead time)
= (50 × 10) + 1,500 – (10 × 3) = 1,970 units
Minimum = re-order level – (average usage × average lead time)
= (50 × 10) – ((10+50)/2 × 5) = 350 units
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