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Question - Use the information provided below to answer the following questions -
1. Calculate the number of orders that should be placed for the year, which would also take into consideration that the most advantageous quantity is ordered each time.
2. Determine the cost (as a percentage) to Zengu Stores of not taking advantage of the rebate offered by Fego Manufacturers
INFORMATION - Zengu Stores purchases a product from Fego Manufacturers which has a steady monthly demand of 8 400 units. The product is purchased from the manufacturer at R40 per unit. The ordering cost is R10 per order. The holding cost is 5% of the unit purchase price. Fego Manufacturers' credit terms to Zengu Stores are 30 days but the manufacturer is prepared to allow a 3% rebate if Zengu Stores pays the account within 10 days.
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