Solve for the following:

1. ABC Company has the following information for the year 2020 and 2021:
2020 2021
Accounts receivable P175,000 P188,500
Accounts payable 130,000 161,200
Merchandise inventory 225,000 305,600
Sales 1,350,000 1,110,800
Cost of sales 625,000 563,700
All sales are on credit. Compute for the firm’s operating cycle and cash conversion cycle.

2. Diego is running a men’s clothing line. He needs to buy 12,000 shirts per year.
He incurs P16 carrying cost and ordering costs of P100.
a. Determine the economic order quantity for the shirts.
b. Determine the annual inventory costs for the firm if it orders in this quantity.

3. ABC Company sells 2,000 units of a product annually at a cost of P50 per unit.
The cost to place an order is P200 and the annual carrying cost per unit is P10.
Calculate the EOQ for the company

4. The following inventory information and relationships for the Mandawe

Corporation are available:
Orders can be placed only in multiples of 100 units.
Annual unit usage is 350,000. (assume a 50-week year in your calculations.)
The carrying cost is 20 percent of the purchase price of the goods.
The purchase price is P15 per unit.
The ordering cost is P60 per order.
The desired safety stock is 2,000 units.
Delivery time is two weeks.
Given this information:
a. What is the optimal EOQ level?
b. How many orders will be placed annually?
c. At what inventory level should a reorder be made?