Alice opens an aquarium store in a lively shopping mall and finds business booming, but she often stocks out of key items customers want. She decides to experiment with inventory-control methods such as using fixed-order quantity (FQS) and/or fixed-order period (FPS) systems. The FLUVAL 303 Pump, a high margin and profitable pump, is one of her best sellers, but it stocks out frequently. You collect the following data with respect to this pumps sales.
A What is the inventory-carrying (holding) cost per pump per year?
B What is the economic order quantity?
C What is the average number of orders per year if using the EOQ?
D What is the reorder point without safety stock?
E What is the standard deviation of demand during the lead time? L = t L
F. What is the safety stock quantity?
G What is the reorder point with safety stock?
H If the current order quantity used by Alice is 20 pumps per order, what is the total annual inventory cost?	TCQ=20 =
I. What is the total annual inventory cost if the EOQ is used?	TCQ=EOQ
J. If the current order quantity used by Alice is 20 pumps per order, how much money can she save by adopting an EOQ ordering policy?

\begin{tabular}{ll} Demand = five units week & \begin{tabular}{l} Store open 50 weeks/year \\ Order cost =$40 /order \end{tabular} \\ Item cost =$80/ pump & \begin{tabular}{l} Std. deviation in weekly \\ demand =6 \end{tabular} \\ Inventory-holding cost =15 & Service level =96 percent \\ percent year & \end{tabular}