Problem I Assume that Fashion Clothiers Inc. uses 1,440,000 yards of material each year. Further, assume that Fashion can order the material at a cost of P2 per yard, plus fixed ordering costs of P100 per order. The firm's carrying cost is 20% of the inventory value at cost. What is the firm's EOQ? What is the firm's minimum costs of ordering and holding inventory? Problem II The following information is available for Carnival Company's Material Z. Annual Usage 12,600 units Working days per year 360 days Normal lead time 20 days The units of Material Y are required evenly throughout the year. What is the reorder point? Problem Ill Refer to the information in the previous problem. Assuming that occasionally, the company experiences delays in the delivery of Material Y, such that the lead time reaches a maximum of 30 days, how many units of safety stock should the company maintain and what is the reorder point? Problem IV IPC expects to use 48,000 gallons of paint per year costing P120 per gallon. Inventory carrying cost is equal to 20% of the purchase price. The company uses its inventory at a constant rate. The lead time for placing the order is 3 days and IPC holds 2,400 gallons of paint as safety stock. If the company orders 2,000 gallons of paint per order, what is the cost of carrying inventory? Annual holding or carrying cost = (20%) (120) (3 (2,000) + 2,400 ) = P81,600