1. what is the value of the average inventory?

2. what is the annual carrying cost?

3. what is the annual ordering cost?

4. what is the annual total cost?

5. recall that the number of days the company operates per year is 250 and lead time is 3 days. If the standard deviation of demand is 3 and you decided you wanted a 98.3% probability of not stocking out of inventory, what would be your reorder point?

D = Annual Demand = S = Setup Cost = H = Holding Cost = 2,500 units per year $18 per order $9 per unit per year