(a). EOQ= ROOT OF 2AO/C =ROOT OF 2*2500*18.75/1.5 =ROOT OF 93750/1.5 =ROOT oF62500 =250 A=Annual demand,O=Ordering cost,C=Carriying cost (b).Average inventory=EOQ/2 =250/2=125 Annual inventory holding cost=Average inventory*holding cost per unit =125*1.5=187.5 (c).Number of orders=Annual demand/EOQ =2500/250=10 Ordering cost=number of orders*cost of order =10*18.75=187.5 (d).Annual inventory cost= Purchase cost- 3750 (2500*1.5=3750 ) carriying cost- 187.5 Ordering cost - 187.5 Total cost 4125 (e).Time between orders=Number of days in a year/no of orders =250/10=25 (f).ROP=Unit sale*lead time =25*2=50 (g).daily demad rate=4125/2500=1.65 Answer (a). EOQ=250 (b).Average inventory=125 Annual inventory holding cost=187.5 (c).Number of orders=10 Ordering cost=187.5 (d).Annual inventory cost=4125 (e).Time between orders=25 (f).ROP=50 (g).daily demad rate=1.65