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A company stocks replacements for water purification filters. Annual demand for these filters is 5000 units. The cost of each filter is$5.33. Annual holding cost
A company stocks replacements for water purification filters. Annual demand for these filters is 5000 units. The cost of each filter is$5.33. Annual holding cost is 15% of the cost of the filter, Each time the company orders it has to pay an ordering fee of $20. Assume 250 working days in a year. What is the economic order quantity for this product? (Round to closest whole number). (5 pts) a. b. What is the optimal number of orders per year? (3 pts) c. What is the average inventory carried if the optimal order quantity is used? (2 pts) If the lead time is 4 days how many units should the company have in stock when it places an order? (2 pts) d. Its current order quantity is 2500 units. How much money willit save by switching to the quantity you calculated in (a)? (8 pts) e
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