Daily sales = 325 units Cost of capital = 22.5%

Std. deviation of daily demand = 39 Inventory Risk = 1.5%

Cost to place an order = $30 Storage space = 5.5%

Freight cost = $250 Insurance = 0.75%

Avg. Inventory (last 12 months) = 2,750 units Current number of warehouses = 24

Cost of 1 unit of inventory = $125 Prime interest rate = 3.9%

Cost of Goods Sold = $14,828,125 Taxes = 1.25%

Selling price of 1 unit = $250 Average annual depreciation = 15.5%

Avg. replenishment cycle = 11 days Std. dev. of replenishment cycle =3 days

Average inventory value = $343,750 Forecast error = 12.5%

Re-stock fee is $55 Days in a year = 365

1. What is the ICC%? (to the nearest tenth of a percent)

2. What is the value of R( (annual rate of demand)? (in the EOQ formula)

3. What is the value of V (value of 1 unit of inventory)?

4. What is the value of S (storage cost in units/yr)? (to the nearest cent)

5. What is the value of Q(replenishment order quantity?

6. If the company plans to close 12 of their warehouses over the next 12 months, how much inventory should they expect to have a year from now?

7. How much safety stock should the company hold if it wants to ensure a 98.3% service level