The sales of a popular mouthwash at Merkle Pharmacies over the past 6 months have averaged 1,600 cases per month resulting in 19,200 cases per month, which is the current order quantity. Merkle’s cost is $10.00 per case. The company estimates its cost of capital to be 12 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 6 percent of item cost. Thus, the annual inventory-holding costs are estimated to be 18 percent of item cost. The cost of placing an order is estimated to be $38.00 per order regardless of the quantity requested in the order.

Questions 1. What is the minimum-cost economic order quantity? Round your answer to the nearest whole number.

Question 2. What is the annual ordering cost based on the minimum-cost economic order quantity? Use the rounded EOQ value in your calculations. Round your answer to the nearest cent.

3. What is the annual inventory holding cost based on the minimum-cost economic order quantity? Use the rounded EOQ value in your calculations. Round your answer to the nearest cent.

4. What is the total annual cost based on the minimum-cost economic order quantity? Use the rounded EOQ value in your calculations. Round your answer to the nearest cent.

5. What are the total cost savings in absolute and relative terms caused by using the minimum-cost economic order quantity instead of the current purchasing policy of Q = 1,600? Use the rounded EOQ value in your calculations. Round your answer for the absolute cost savings to the nearest cent and answer for relative cost savings to the nearest whole number. EOQ Benefit: $ , EOQ Benefit (%)

How this Canadian-born paper company thrives in a paperless era In July, 1918, a Torontonian named Roy Hill took a gamble. He borrowed $432 from a life insurance policy and $1,500 from his parents – who took out a second mortgage on their home to do it – to start his own business: He called it the Canadian Pad and Paper Company. Hill worked 16-hour days out of his Wellington Street office in downtown Toronto. He was the company’s manager, salesman, shipper and paper cutter – and did it all using rented equipment. In the evenings his wife would streetcar to the factory to help package the shipments. Within two years, the Canadian Pad and Paper Company outgrew its offices and moved to a larger space nearby. Slowly but surely, Hill’s gamble paid off. Business was thriving. Hill’s cardboard-covered notebooks could be found in schools everywhere. Following the purchase of another envelope company in 1958, Roy Hill changed the name of the company to Hilroy Envelopes and Stationary Limited. The business moved yet again to – appropriately – an elementary school-looking building on Eglington West. Roy Hill – who remained chairman of the board well into old age – passed away in 1978, leaving behind a Canadian legacy. Hilroy’s primary-coloured exercise books have been a staple in Canadian classrooms for the better part of a century. And here’s the remarkable thing: The brand still produces 14 million of those notebooks a year – making it the largest stationary company in the country. It takes just 45 seconds to make a Hilroy notebook. But it takes years to build an iconic brand. It’s amazing that a paper company can not only survive, but still thrive in a paperless era.

Considering that Seneca Solar has successfully delivered more than 100 solar panel installation projects for different building sizes in the last 5 years and that in a project the costs incurred are $ 82 per solar panel and that Phase 1 will require 1200 solar panels

• Which estimation method would you use [0.5 mark]

• Specify and explain why? [0.5 mark]

CEO at Hilroy wants to see the work package in the WBS and also wants to understand how you would make the budget for your project.

• Name the steps to convert WBS to a project schedule? [2 marks]

• How critical path analysis helps you as a project manager in managing time and cost? [3 marks]