- This topic has 1 reply, 2 voices, and was last updated 5 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
Interactive BPP books for June 2026 exams, recommended by OpenTuition.
Get discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › EOQ with dis
BB manufactures a range of electronic products. The supplier of component Y has informed
BB that it will offer a quantity discount of 1% if BB places an order of 10,000 components or
more at any one time.
Details of component Y are as follows:
Cost per component before discount RM2
Annual purchases 150,000 components
Ordering costs RM360 per order
Holding costs RM3 per component per annum
Required:
(a) Calculate the total annual cost of holding and ordering inventory of component Y using
the economic order quantity and ignoring the quantity discount.
(b) Calculate whether there is a financial benefit to BB from increasing the order size to
10,000 components in order to qualify for the 1% quantity discount.
Answer:a)Holding:9000,ordering 9000
B)holding 15000,ordering 5400
Can i know how to calculate this ans??
I work through a similar example in my free lectures on inventory and show exactly how to do it.
Please watch the lectures – they are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
