Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation.

$$

$$

$$

Thomas

$\text{'}$

s fastest

$-$

moving inventory item has a demand of

$6$

$1$

$0$

$0$

$$

$$

units per year. The cost of each unit is

$$

$

$$

$1$

$0$

$2$

$,$

$$

$$

and the inventory carrying cost is

$$

$

$1$

$1$

$$

$$

per unit per year. The average ordering cost is

$$

$

$2$

$9$

$$

$$

per order. It takes about

$5$

$$

$$

days for an order to

$$

$$

$$

arrive

$,$

$$and the demand for

$1$

$$

$$

week is

$1$

$2$

$2$

$$

$$

units

$.$

$$

$$

$($

This is a corporate

$$

$$

$$

operation

$,$

$$and there are

$2$

$5$

$0$

$$

$$

working days per

$$

$$

$$

year

$)$

eoq

$=$

$1$

$7$

$9$

$.$

$3$

$4$

$$What is the average inventory if the EOQ is

$$

$$used$?$ what is the optimal number between any two orders