M9.1 Chris Froome is a purchasing agent for a firm that sells components for high-performance bicycles. One of the most popular components is the TDF bicycle frame which has an annual demand of 1,750units. The cost of each frame is $675and the inventory carrying cost is estimated to be 18% of the cost of each frame. Chris has made a study of the costs involved in placing an order for any of the frames the firm stocks, and he has concluded that the average ordering cost of $73per order. Furthermore, it takes about one week for an order to arrive from the supplier, and the TDF operates 50 weeks per year.

What is the annual ordering cost? What is the annual holding cost? How many orders {on average) would be placed per year? What is the average inventory? What is the reorder point? What is the E00? M92 Hiking Boots R Us is a local shoe store in Franklin. Annual demand for a popular hiking boot is 7'00 pairs per year, and Nairo Quintana, the owner of Hiking Boots R Us, has the habit of ordering 60 pairs of these hiking boots every time he places an order. Nairo estimates that the ordering cost is $20 and the cost of the hiking boots is $63. [Goal Seek would be useful if you are using the Excel template, otherwise you can use the equations, this is a situation when you know "Cl\" and are determining other parameters in the calculation of \"0\"}. a} What is the annual ordering cost if the optimal ordering quantity is 60? b] What is the carrying cost [556} if the optimal ordering quantity is 60? [Enter real nu mber- i.e. 12.5% should be entered as 12.5] c] What is the annual holding cost if the optimal ordering quantity is 60? d] What is the E00 if carrying cost is 15%