2 x 52 x 4.000 200 h38 Cost of carrying one unit for one period 200 x 200 - 40,000 $16.000 Cost of carrying one unit for one period Cost of carrying one unit for one period = $0.40 10.4 The Robney Company is a restaurant supplier which sells a number of products to various restaurants in the area. One of their products is a special meat cutter with a disposable blade. The blades are sold in packages of 12 blades for $20.00 per package. After a number of years, it has been determined that the demand for the replacement blades is at a constant rate of 2.000 packages per month. The packages cost the Robney Company $10.00 each from the manufacturer and require a three-day lead time from date of order to date of delivery. The ordering cost is $1.20 per order and the carrying cost is 10 percent per annum. 1. Calculate: (a) The economic order quantity (b) The number of orders needed per year (c) The total cost of buying and carrying blades for the year 2. Assuming that there is no safety stock and that the present inventory level is 200 packages, when should the next order be placed? (Use 360 days equals one year.) 3. Discuss the problems that most firms would have in attempting to apply this formula to their inventory problems