• • 12.35 Rick Jerz is attempting to perform an inventory analysis on one of his most popular products. Annual demand for this product is 5,000 units; carrying cost is $50 per unit per year; order costs for his company typically run nearly $30 per order; and lead time averages 10 days. (Assume 250 working days per year.)

a) What is the economic order quantity?

b) What is the average inventory?

c) What is the optimal number of orders per year?

d) What is the optimal number of working days between orders?

e) What is the total annual inventory cost (carrying cost + ordering cost)?

f) What is the reorder point?

• • • 12.36 Al-Tawheed Discount Store sells a certain type of office chair for E£400. The annual holding cost is E£40 per unit per year, annual demand is 900 chairs, and the order cost is E£800 per order. The lead time is 14 days. The store is open 360 days per year.

a) If the company is ordering twice per year, what is the total cost of inventory?

b) If the company uses the basic EOQ model, how many orders will be placed per year and what is the total cost of inventory?

c) What is the reorder point?