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The consulting agency must better plan inventory needs for their new water/wastewater facility. When the population needs clean water and the facility does not have

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The consulting agency must better plan inventory needs for their new water/wastewater facility. When the population needs clean water and the facility does not have the necessary materials to provide it, it must shutdown. Water tests are frequently conducted and test kits are purchased to support critical decisions on chemical use and equipment adjustments. For the past year s data, the average water test kit use was 1,320 per month. Additionally the consulting agency calculates the following costs from the past year s performance: Unit Cost per Test Kit =$285 Ordering Costs buyer, transportation, receiving, other) per lot =$70 - Inventory Holding Costs per year as a faction of unit cost (capital, obsolescence, handling, occupancy, other =20% Using the Economic Order Quantity model, what is the optimal order size? 182 259 231 197

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