Analysis of inventory Mario Company consistently uses 1,000 gallons of styrene per month in the manufacture of several of its products. The material costs $9 per gallon, and inventory carrying cost is 14 percent of product cost. Ordering cost is $90 per order and lead time is 15 days. The company operates 273 days per year. It maintains a 3-day supply of safety stock.

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REQUIRED a. Compute the EOQ for styrene. b. Determine the total inventory cost at the EOQ. c. Determine the expected lead time demand. d. Determine the reorder point for styrene. e. Compute the cost of providing the safety stock. f. Compute total inventory cost with the safety stock. Computer requirements The company's product mix recently has been reclassified by its insurance company as a high- risk production activity. Also, bond rating services have suggested the company's bond rating may be changed. In light of the above circumstances, inventory planners are unsure of what to use as the carrying cost of inventory. The estimates have ranged from 10 percent to 25 percent. g. Using the new estimates of inventory carrying costs in increments of 5 percent, recompute any of requirements a through fin which inventory carrying cost has an impact. h. The higher insurance costs may drive a number of competitors out of the business. Recompute any affected requirements a through fusing production increases of 20, 40, 60, and 80 percent. Assume a carrying cost of 20 percent.