Jones Surgicenter uses 90,000 bags of IV solution annually. The optimal safety stock (which is on hand
initially) is 1,000 bags. Each bag costs the center $1.50, inventory carrying costs are 20 percent, and
the cost of placing an order with its supplier is $15.
a. What is the economic order quantity?
b. What is the maximum inventory of IV solution bags?
c. What is the center's average inventory of IV solution bags?
d. How often must the center order (in days)?