Kamran Paint Company uses 60,000 gallons of pigment per year. The cost of ordering

pigment is Tk.200 per order, and the cost of carrying the pigment in inventory is Tk.1.00 per

year. The firm uses pigment at a constant rate every day throughout the year.? p

=TK,s

a.

How much pigment should the firm order every time to minimize on total costs?

b.

Calculate the total cost of the plan?

C.

Determine the total number of orders suggested by the plan.

d

Assuming that it takes 20 days to receive an order once it has been placed, determine the

level of pigment storage at which the firm has to place the next order of pigment.

e.

What are the average and maximum values of inventory for the firm?