inventory costs (order costs and holding costs)

Implement the Economic Order Quantity model

1) Thomas Kratzer is the purchasing manager for the headquarters of a large Hotel with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 15000 units per year. The cost of each unit is $3, and the interest on tied-up money is %20. The average ordering cost is $400 per order. This is a corporate operation, and there are 250 working days per year.

a) What is the EOQ? units (round your response to two decimal places).

b) What is the optimal number of orders per year? orders (round your response to two decimal places).

c) What is the optimal number of days in between any two orders? days (round your response to two decimal places).

d) What is the annual cost of ordering inventory? $ per year (round your response to two decimal places).

e) What is the total annual inventory cost, including the annual purchase cost of the units? per year (round your response to two decimal places).