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Question - You have been appointed as a cost and management accountant of JJ Limited manufactures. The company manufactures tables and import the wood used to make the tables. 6 meter of wood is used for one table. The total production for the year is 110 000 tables. The company operates for 50 weeks per annum. The cost of placing an order is R35. Maximum production is 3 800 tables and minimum production is 1 800 tables per week. Maximum lead time is 2 weeks and minimum lead time is 1 week. The cost to hold a table is R32.
REQUIRED -
1. Calculate the Economic order quantity.
2. Calculate the Re-order level.
3. Calculate the Minimum inventory level.
4. Calculate the Maximum inventory level.
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