ABC produces and sells boots. After production the boots are distributed to 5 warehouses across the Province. Each warehouse serves approximately 25 stores in its region. ABC uses an EOQ model to determine the number of boots to order from the factory. Annual demand for warehouse #1 is 36,000 units. The ordering cost is $135 per order. The annual carrying costs of a pair of boots is $12 per pair.

A) Use the EOQ model to determine the optimal number of pairs of boots to order

B) Assume each year consists of approximately 300 days. If it takes 3 days to receive an order - At what point should warehouse #1 re-order the boots

C)Assume warehouse#1 monthly demand equals 3,000 units. The demand may increase by up to 10%. ABC determines that it should keep enough safety stock to hanndle any demand. How much safety stock should be ordered - How will it effect the reorder point and reorder quantity.

D) What are the total annual relevant ordering and carrying costs with safety stock and without safety stock

E) Now ignore safety stock. Suppose actual order costs are $90 and carry costs are $15. How much does the error cost?