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- Adapted from Source: Fairlady. 2021. Masodi Organics. [Online]. Available at: https://www.pressreader.com/south-africa/fairlady/20211101/282041920317048 [Accessed 11 September 2023]. Question 1 Q.1.1 Distinguish between a continuous review model and a periodic review model, and recommend the most appropriate replenishment system for Masodi Organics. Note: you are required to provide a paraphrased comparison of the review modules with an application point for each before providing a justified recommendation. Q.1.2 Explain the four types of inventory purchases that goods at Masodi Organics can be divided. Note: you are required to provide a paraphrased overview of each type of inventory purchase before providing a practical example for each.arrow_forward36 [Question text] The Swank Furniture Company is trying to determine the optimal order quantity for rocking chairs. Annual sales are 1,200 units, and the retail price is RM40 per unit. The carrying cost is 20 % of its price. It costs RM20 to prepare and receive an order. The company currently order 100 units per order with a total inventory cost of RM660. The calculated economic order quantity (EOQ) equals 77 units. Should the company continue to order 100 units every time it places an order or change the quantity to the calculated EOQ? Select one: A. Use the calculated EOQ as the company will pay only RM40. B. Continue to order 100 units as there will be no differences in total cost. C. Continue to order 100 units and enjoy an RM40 cash discount. D. Use the calculated EOQ as the total cost will be reduced by RM40.arrow_forwardQuestion 3The weekly demand for a product, which is held in stock is always 90 units.When an order for new stock is placed, it is delivered almost instantaneously by an ordering cost of 50,000 is incurred. The product costs 3,000 per unit,and it costs 15 percent of this amount to hold a unit in stock for a year.Currently, orders are placed for 2000 units. There are 50 working weeks in ayear and lead time is one week. a) As a management science student, the MD of the company seeks yourexpert advice on ways in which to determine the economic order quantity,optimal order cycle time, re-order level and total annual inventory cost.Advise the MD, providing detailed explanation using your answer. Writeyour answer in a form of a report to the MD. b) Advise the MD about savings, if any, could be made by changing fromcurrent order quantity of GH¢ 2000 units to the one obtained in (a) above. c) Describe the order policy followed by the firm based on your calculationsarrow_forward
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