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Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has
Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 5,850 units per year. The cost of each unit is $96, and the inventory carrying cost is $11 per unit per year. The average ordering cost is $31 per order. It takes about 5 days for an order to arrive, an the demand for 1 week is 117 units. (This is a corporate operation, and there are 250 working days per year). a) What is the EOQ? units (round your response to two decimal places). b) What is the average inventory if the EOQ is used? units (round your response to two decimal places). c) What is the optimal number of orders per year? orders (round your response to two decimal places). a) What is the EOQ? Q=H2DS=2units (round your response to two decimal places). b) What is the average inventory if the EOQ is used? Average Inventory =2Q= units (round your response to two decimal places). c) What is the optimal number of orders per year? OptimalNumberofOrders=PerOrderQuantityAnnualDemand=QAnnualDemand=Orders(roundyourresponsetotwodecimalplaces). d) What is the optimal number of days in between any two orders? e) What is the annual cost of ordering and holding inventory? Order Cost = Number of Orders Per Order Cost Holding Cost = Avgerage Inventory Holding Cost per Unit per Year Total Ordering and Holding Cost = Ordering Cost + Holding Cost =$ per year (round your response to two decimal places). f) What is the total annual inventory cost, including the cost of the 5,900 units? Total Annual Inventory Cost = Total Ordering and Holding Cost + Total Cost of Goods Sold =$ per year (round your response to two decimal places
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