An automobile manufacturer uses about 6,000 pairs ofbumpers (front bumper and rear bumper) permonth, which it orders from asupplier. The bumpers are used at a reasonably steady rate during the 240 working days per year. Itcosts $3.00 to keep one pair ofbumpers in inventory for one month, and it costs $25.00 to place an order. A pair of bumpers costs $150.00.

Required;

a) Calculate EOQ.

b) Calculate total inventory cost

c) If suppliers offer 20% discount at a purchase of 20,000 bumpers which order size would be more economical.

d) assuming a 300 day-day work year, calculate the frequency of orders

e) Calculate safety stock if maximum use per day is 5 units and average use per day is 3 units assuming lead of 5 days.