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Sky Ltd produces and sells cameras. The camera lenses are ordered from a supplier in Germany and it takes about 3 to 6 weeks for the lenses to be delivered from the date the order is placed. The company operates for 50 weeks a year. One lens cost R900. The cost of placing an order is R400 and the cost of storing one lens per annum is R183. Minimum usage per week 23 lenses Maximum usage per week 67 lenses Required Calculate the following: 1.1 Economic order quantity 1.2 Total order cost for the year 1.3 Total storage cost for the year 1.4 Total cost of material used in production 1.5 Re-order level 1.6 Maximum inventory level 1.7 Minimum inventory level 1.8 Average inventory level 1.9 Safety stock
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