Fruitcake Specialists sells 36,000 fruit cakes annually. Annual carrying cost are P5 per fruit cake and the ordering costs are P100 per order.

The firms has decided to maintain a safety stock of one month

'

s sales or 3,000 fruitcakes. The delivery time per order is 5 days. Assume a

365-day year.

REQUIRED:

A)

What is the economic order quantity (EOQ)?

B)

What is the average inventory?

C)

How may orders should be placed each year?

D)

What is the total inventory cost?

E)

What is the reordering point?