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(a) Supply chain management is the integration of the activities that procure materials and services, transform them into intermediate goods and the final product, and deliver them to customers. The key to a successful supply chain structure and operation depends upon a customer/supplier relationship based on partnership principles. Critically discuss the importance for companies to develop a supply chain strategy.
(b) Leal Communication Ltd stocks and sells Toshiba note-book. It costs the store $400 each time it places an order with the manufacturer. The annual cost of carrying the note-book in inventory is $150. The store manager estimates that the annual demand for such note-book will be 1200 units.
(i) Explain why organisations hold inventory.
(ii) Evaluate optimal order quantity and total annual inventory costs.
Hard Change Initiatives - Linking Strategic 1. Total quality management (TQM)/ISO 9000 2. Enterprise resource planning (ERP)/material requirements planning; manufacturing
Question: (a) (i) What are the assumptions to be respected while deriving the Economic Order Quantity formula. (ii) Describe the several components of inventory holding c
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