A manufacturing company has determined from an analysis of its accounting and production data for a certain part that (i) its demand is 9,000 units per annum and is uniformly distributed over the year, (ii) its cost price is Rs 2 per unit, (iii) its ordering cost is Rs 40 per order, (iv) the inventory carrying charge is 9% of the inventory value.

Further, it is known that the lead time is uniform and equals 8 working days, and that the total working days in a year are 300.

Determine:

(a) The economic order quantity, EOQ;

(b) The optimum number of orders per annum;

(c) The total ordering and holding cost associated with the policy of ordering an amount equal to EOQ;

(d) The re-order level;

(e) The number of days' stock at re-order level;

(f) The length of the inventory cycle;

(g) The amount of savings that would be possible by switching to the policy of ordering EOQ determined in

(a) from the present policy of ordering the requirements of this part thrice a year; and

(h) The increase in the total cost associated with ordering (i) 20% more, and (ii) 40% less than the EOQ.