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THE BRINKMAN MEDICAL SUPPLY COMPANY WISHES TO DETERMINE AN APPROPRIATE INVENTORY POLICY FOR ITS KIDNEY DIALYSIS FILTERS. BASED ON THERECORD FOR THE LAST FEW YEARS,

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THE BRINKMAN MEDICAL SUPPLY COMPANY WISHES TO DETERMINE AN APPROPRIATE INVENTORY POLICY FOR ITS KIDNEY DIALYSIS FILTERS. BASED ON THERECORD FOR THE LAST FEW YEARS, THE OPERATIONS AGER MANAGER FOR THE COMPANY ESTIMATES ANNUAL SALES OF KIDNEY DIALYSIS FILTERS TO BE 8,000. THE COST OF PLACING AN ORDER FOR THE FILTERS WITH THE MANUFACTURER IS exist300. IN ADDITION, THE COST OF STOCKING AND MAINTAINING THE FILTERS IS ESTIMATED AS exist20 PER YEAR FOR EACH FILTER. THIS COST INCLUDES THE COST PHYSICAL STORAGE, MAINTENANCE INSURANCE ETC. IT IS DESIRED TO DETERMINE AN OPTIMAL ORDERING POLICY WHICH WILL MINIMIZE TOTAL ANNUAL COST TO THE BRINKMAN AT CORPORATION. THE FORMULAS FOR THE INVENTORY MODEL TO BE USED ARE SHOWN THE END OF THIS PROBLEM. CALCULATE THE ECONOMIC ORDER QUANTITY (Q^*) FROM THE FORMULAS. ALSO CALCULATE THE TOTAL ANNUAL COST FOR THIS POLICY, ALSO FROM FORMULAS. NOTE THE FOLLOWING DEFINITIONS: TC = TOTAL ANNUAL COST D = ANNUAL DEMAND FOR DIALYSIS PER ORDER Q = NUMBER OF DIALYSIS FILTERS ORDER Co = THE FIXED COST OF PLACING AN ORDER CC = CARRYING (HOLDING) COST PER FILTER PER YEAR. A) WHAT IS THE SIZE OF THE ORDER QUANTITY TO BE PLACED WITH THE MANUFACTURER WHENEVER AN ORDER IS PLACED (E.O.Q.) VALUE? SHOW YOUR CALCULATION BELOW._______

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