Currently Nanuq Australia buys a batch of 800 bearings every month for $2,400 a batch. The ordering cost is $80 per order.

The insurance cost and the opportunity tied up are 15% of the average inventory per year.

Part 1

1.How many bearings are required per year?

2.List all parameters of the Inventory Model along with their values

3.Find the economic order quantity.

4.Find the time between orders (in days)

5.Find the total annual relevant cost.

6.Formulate the Inventory Policy .

Part 2

7.Suppose that shortages are allowed 8% of the time. Find the service level and imputed shortage penalty.

8.Find the optimal order quantity.

9.Find the maximum inventory level.

10.Find the time between orders (in days).

11.Find the total annual relevant cost.