1. Assume you have a product with the following parameters: Annual Demand =360 units Holding cost per year =$1.00 per unit Order cost =$100 per order a. What is the EOQ for this product? b. Assuming a 300-day work year, how many orders should be processed per year? c. What is the expected time between orders? d. What is the total cost for the inventory policy? e. What would cost be if the demand was actually higher than estimated (i.e., 500 units instead of 360 units), but the EOQ established in part (a) is used? What will be the actual annual total cost? 2. If demand for an item is 3 units per day, and delivery lead-time is 15 days, what should we use for a simple re-order point? 3. We use 1,000 electric drills per year in our production process. The ordering cost for these is $100 per order and the carrying cost is assumed to be 40% of the per unit cost. In orders of less than 120 , drills cost $78 per unit; for orders of 120 or more the cost drops to $50 per unit. Should we take advantage of the quantity discount? 4. Assume that our firm produces Type C fire extinguishers. We make 30,000 of these fire extinguishers per year. Each extinguisher requires one handle (assume a 300 day work year for daily usage rate purposes). Assume an annual carrying cost of $1.50 per handle, production setup cost of $150, and a daily production rate of 300 . What is the optimal production order quantity