(Answered) : Question 2 Kafue Steel Recorded Monthly Forecast One Products Mild Steel Grade Aisi 1023 R Q28735662

QUESTION 2:

Kafue Steel has recorded the monthly forecast for one of itsproducts, mild steel grade AISI 1023 rods, for January, February,March and April as 1000, 1500, 1200, and 1400, respectively. Safetystock policy recommends that half of the forecast for that month bedefined as safety stock. There are 22 working days in January, 19in February, 21 in March and 21 in April. Beginning inventory is500 units.

Manufacturing cost is K1,000,000 per unit, storage cost isK15,000 per unit per month, standard pay rate is K30,000 per hour,overtime rate is K45,000 per hour, cost of stock out is K50,000 perunit per month, marginal cost