Given the following:

Annual Demand 300,000 units

Number of Days of Operations 360 days
Lead Time 14 days
Safety Stock Levels:
Safety Stock Probability of Stockout
0 60%
100 50%
200 40%
300 20%
400 10%
Stockout Cost P 100 per occurence
Carrying Cost P 50
Number of Orders in a Year 24

Compute for:
1. Lead Time Usage
2. Optimal Level of Safety stock
3. Reorder Point

Given the following:

XYZ is contemplating on changing its credit terms to customers from terms 2/10, n/30 to 2/15, n/60.

Current level of credit sales is P 5,000,000

Cost of sale is 60% of sales.
Increase in sales as a result of change in credit terms 10%
Number of days of operations in a year is 260 days
Opportunity cost is 12%.
Under the old credit term, 20% of customers are paying within the discount period. Under the new
credit term, 30% of customers are expected to pay within the discount period.
Rate of doubtful accounts will increase by 5% of increase in credit sales.
Collection cost will increase by 10% of increase in credit sales.

Should the company change its credit terms? (Show your computation.)