Question 2

2.1

The table above shows the maximum combinations of apples and pears that a
hypothetical farmer can produce in a year, given the available resources. Each
combination represents a specific quantity of apples and pears that can be produced
by efficiently utilizing all the resources. The table demonstrates the concept of
production possibilities, indicating the trade-off between producing apples and pears
due to limited resources.

2.2

If the farmer uses all his resources for apple production, according to the table, the
maximum number of apples that can be produced is 100.

2.3

Land and Capital

2.4

Efficient use of resources refers to the utilization of available resources in a way that
maximizes output or production. It implies that resources are allocated in such a
manner that there is no waste or inefficiency.

On a Production Possibility Curve (PPC), the concept of efficient resource allocation

is depicted by points along the curve itself. Points on the curve represent
combinations of goods or outputs that are produced using all available resources in
the most efficient manner. These points demonstrate the maximum output that can be
achieved with the given resources and technology.

Inside the PPC, points represent underutilization of resources, indicating that the
economy is not operating at its full potential. On the other hand, points outside the
 PPC represent unattainable combinations of goods given the current level of resources
and technology.

Therefore, the PPC visually represents the concept of efficient resource allocation by
showing the various possible combinations of goods that can be produced using
available resources, and points on the curve represent the most efficient utilization of
those resources.

2.5
F
40

E
35

Pears D
30

25
C

20
B

15 A

0 20 40 60 80 100

Apples
Question 3

3.1

EOQ = √((2 * D * S) / H)

Where: D = Annual demand (total units required in a year) S = Cost per order H =
Carrying cost per unit

The demand for the first four months is 5250 units per month, and for the remainder
of the year, it is 3625 units per month.

For the first four months: D1 = 5250 units/month * 4 months = 21,000 units For the
remainder of the year: D2 = 3625 units/month * 8 months = 29,000 units

Using the formula:

EOQ1 = √((2 * D1 * S) / H) = √((2 * 21,000 * 1000) / 2) = √(42,000,000) = 6,480

units (rounded)

EOQ2 = √((2 * D2 * S) / H) = √((2 * 29,000 * 1000) / 2) = √(58,000,000) = 7,616

units (rounded)

Therefore, the EOQ for the tire orders is 6,480 units for the first four months and
7,616 units for the remainder of the year.

窗体顶端

3.2

Stockouts

Holding little inventory increases the risk of stockouts, where the company runs out of
stock for a particular item. Stockouts can lead to lost sales, dissatisfied customers, and
potential damage to the company's reputation. It may also result in the need for
expedited shipping or emergency orders, incurring additional costs.

Increased lead time risk

Holding minimal inventory can leave the company vulnerable to disruptions in the
supply chain or delays in delivery from suppliers. Any unexpected delay or disruption
in the supply chain can result in production delays or even halt operations
temporarily, leading to lost sales and customer dissatisfaction.

Reduced economies of scale

Ordering smaller quantities of inventory may lead to higher unit costs due to a
reduced ability to take advantage of economies of scale. Suppliers may offer
discounts or lower prices for larger orders, and with smaller orders, the company may
miss out on these cost-saving opportunities.

Lack of flexibility and responsiveness

With little inventory on hand, the company has limited flexibility to respond to
sudden changes in customer demand or market conditions. It becomes challenging to
fulfill unexpected or large orders promptly. This lack of flexibility can result in
missed sales opportunities and lower customer satisfaction.

Holding little inventory may seem cost-effective initially, but it carries several risks
and costs that can adversely impact the company's operations, customer satisfaction,
and financial performance. Companies need to carefully balance inventory levels to
ensure they have adequate stock to meet customer demand while minimizing costs
and risks.

3.3

Several factors can influence an enterprise's ability to secure adequate financing:

Creditworthiness and Financial Health

Lenders and investors assess an enterprise's creditworthiness and financial health

before providing financing. Factors such as the enterprise's credit history,
profitability, cash flow, debt levels, and financial ratios (e.g., debt-to-equity ratio)
play a crucial role. A strong credit history, positive financial performance, and healthy
cash flow increase the likelihood of securing financing at favorable terms.
Market and Industry Conditions

The market and industry in which the enterprise operates can significantly impact its
ability to secure financing. Lenders and investors consider factors such as market
demand, growth prospects, competition, regulatory environment, and industry trends.
A promising market with growth opportunities and a favorable industry outlook can
enhance the enterprise's attractiveness to financiers, making it easier to obtain
financing.

Business Plan and Strategy

A well-developed business plan and a clear strategy are vital in securing financing.
Financiers want to understand the enterprise's goals, market positioning, competitive
advantages, revenue projections, and risk management strategies. A comprehensive
and convincing business plan, demonstrating a well-thought-out strategy, market
understanding, and realistic financial projections, can instill confidence in lenders and
investors, increasing the likelihood of obtaining financing.

Additionally, other factors may include the enterprise's collateral or assets available
for securing loans, the management team's experience and track record, relationships
with lenders and investors, prevailing interest rates and lending conditions, and
economic factors such as inflation, exchange rates, and political stability.

It is essential for enterprises to proactively address these factors by maintaining good

financial practices, conducting thorough market research, preparing solid business
plans, building relationships with lenders and investors, and staying informed about
the economic and industry landscape.
Question 4

4.1

Company A

Current Assets: R95,123 million

Current Liabilities: Total Liabilities - Non-Current Liabilities

Current Liabilities = R75,231 million - R45,232 million = R29,999 million

Current Ratio = Current Assets / Current Liabilities

Current Ratio = R95,123 million / R29,999 million Current Ratio = 3.1711

Company B

Current Assets: R102,343 million

Current Liabilities: Total Liabilities - Non-Current Liabilities

Current Liabilities = R85,010 million - R34,142 million = R50,868 million

Current Ratio = Current Assets / Current Liabilities

Current Ratio = R102,343 million / R50,868 million Current Ratio = 2.0126

Company C: Current Assets: R152,342 million

Current Liabilities: Total Liabilities - Non-Current Liabilities Current Liabilities =

R95,010 million - R53,434 million = R41,576 million

Current Ratio = Current Assets / Current Liabilities Current Ratio = R152,342 million
/ R41,576 million Current Ratio = 3.6629

Therefore, the current ratio for Company A is approximately 3.1711, for Company B
it is approximately 2.0126, and for Company C it is approximately 3.6629.
4.2

Company A

Current Assets: R95,123 million

Inventories: R5,412 million Accounts Receivable: Not provided (assumed to be

included in current assets)

Quick Assets = Current Assets - Inventories

Quick Assets = R95,123 million - R5,412 million

Quick Assets = R89,711 million

Current Liabilities: Total Liabilities - Non-Current Liabilities

Current Liabilities = R75,231 million - R45,232 million

Current Liabilities = R29,999 million

Acid Test Ratio = Quick Assets / Current Liabilities

Acid Test Ratio = R89,711 million / R29,999 million

Acid Test Ratio = 2.9903

Company B

Current Assets: R102,343 million

Inventories: R6,454 million

Accounts Receivable: Not provided (assumed to be included in current assets)

Quick Assets = Current Assets - Inventories

Quick Assets = R102,343 million - R6,454 million

Quick Assets = R95,889 million

Current Liabilities: Total Liabilities - Non-Current Liabilities

Current Liabilities = R85,010 million - R34,142 million

Current Liabilities = R50,868 million

Acid Test Ratio = Quick Assets / Current Liabilities

Acid Test Ratio = R95,889 million / R50,868 million

Acid Test Ratio = 1.8842

Company C

Current Assets: R152,342 million

Inventories: R10,343 million

Accounts Receivable: Not provided (assumed to be included in current assets)

Quick Assets = Current Assets - Inventories

Quick Assets = R152,342 million - R10,343 million

Quick Assets = R141,999 million

Current Liabilities: Total Liabilities - Non-Current Liabilities

Current Liabilities = R95,010 million - R53,434 million

Current Liabilities = R41,576 million

Acid Test Ratio = Quick Assets / Current Liabilities

Acid Test Ratio = R141,999 million / R41,576 million

Acid Test Ratio = 3.4143

Therefore, the acid test ratio for Company A is approximately 2.9903, for Company B
it is approximately 1.8842, and for Company C it is approximately 3.4143.