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1 markInventory Management

CAPE Management of Business Unit 2 · 2015 · Paper 2 · Question 1(b)(i)

Inventory management figures for UUL: Ordering cost = USD350.00, Holding cost = USD700.00, Annual demand = 3 000 metres of fabric.

State the formula for calculating economic order quantity.

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Other parts of this question

  1. 1(a)(i)Define the term 'Economic order quantity'.[2 marks]
  2. 1(a)(ii)Define the term 'Just-in-time'.[2 marks]
  3. 1(a)(iii)Define the term 'Inventory management'.[2 marks]
  4. 1(b)(ii)Calculate the economic order quantity for the sky blue gabardine fabric used by Unique Uniforms Ltd.[6 marks]
  5. 1(c)Discuss THREE ways in which Unique Uniforms Ltd can benefit from having a proper inventory management system.[12 marks]

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