11.4 WE CARE ASSOCIATES (WCA), a local physician practice group, orders supplies from Various distributors. Order quantities of fifteen items have been determined based on the past five years of usage. Other relevant information from the practices inventory records is depicted in Table EX 11.4 . The practice is functional for fifty - two weeks a year.

Table EX 11.4

Item No.	Weekly Demand (Unit/Week)	Unit Cost in $	Yearly Carrying rate of each item	Ordering Cost in $
1	400	2.50	15%	12.00
2	1,600	0.50	16%	6.00
3	175	37.50	20%	32.00
4	250	3.50	12%	50.00
5	250	1.75	18%	12.00
6	32	2,300.00	2%	35.00
7	1,500	1.25	14%	10.00
8	2,200	0.65	17%	6.00
9	1,270	0.95	21%	5.00
10	120	12.50	12%	12.00
11	220	2.00	15%	28.00
12	350	1.50	14%	18.00
13	18	5,000.00	2%	25.00
14	6	6,700.00	2%	50.00
15	1,250	2.60	22%	19.00

a. Determine the basic EOQ on each item.

b. Provide the ABC classification of these items.

c. Calculate the yearly cost of inventory management.

d. Calculate the investment cost (per cycle) for each item.

e. Explain the difference between inventory management cost and investment cost.