1. A company annually deals with 10000 bottles of balms. The cost per bottle is Rs. 20...

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1. A company annually deals with 10000 bottles of balms. The cost per bottle is Rs. 20 and the company's cost of placing an order for the balm is Rs. 500. The company's standard annual return on working capital fund is 12%. The cost of physical storage of the balm is fixed.

(a) Determine the optimal order quantity;

(b) Inventory cycle duration for the balm;

(c) How many orders should be placed each year?

(d) Find the total relevant annual inventory cost for the balm.

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