Reference no: EM132618869

The following information relates to inventory-relationship of M. Ltd;

i) Annual purchase sh.1,080,000

ii) Purchase price per unit is sh.30.

iii) Carrying cost is 15% of the purchase price per unit.

iv) Cost per order placed is sh.120.

v) Desired stock level is 1500 units. This stock level was in hand initially.

vi) Lead time is 7 days.

Problem i) Compute the economic order quantity.

Problem ii) What is optimal number of orders to be placed in the year?

Problem iii) Assuming 52 weeks in a year, determine the inventory conversion period.