Barbara Bright is the purchasing agent for West Valve Company. West Valve sells industrial valves and fluid control devices. One of the most popular is the Western, which has an annual demand of $4000$ ?units. The cost of each valve is $$90,$ ?and the inventory carrying cost is estimated to be $10\%$ ?of the cost of each valve. Barbara has made a study of the costs involved in placing an order for the valves that West Valve stocks and she has concluded that the average ordering cost is $$25$ ?per order. Furthermore, it takes about two days for an order to arrive from the supplier, and during this time the demand per week for West valves is approximately $80.$ ?The store operates for $250$ ?days of the year.

Richard has asked you to develop an Optimal Inventory Control Policy to include:

d$)$ ?Total Annual Costs

g$)$ ?Reorder Point

$1)$ ?Cycle Time $($Days$)$

Page $3$ ?of $4$

a$)$ ?Economic Order Quantity

$(2$ ?marks$)$

b$)$ ?Annual Holding Costs

$(2$ ?marks$)$

c Annual Ordering Costs

$(2$ ?marks$)$

$(1$ ?marks$)$

e$)$ ?Maximum Inventory Level

$(1$ ?marks$)$

$1)$ ?Average Inventory Level

$(1$ ?marks$)$

$($marks$)$

h$)$ ?Number of Orders per year

$(1$ ?marks$)$

$(1$ ?marks$)$