Problem:

Jones Surgicenter uses 90,000 bags of IV solution annually. The optimal safety stock (which is on hand initially) is 1,000 bags. Each bag costs the center $1.50, inventory carrying costs are 20 percent, and the cost of placing an order with its supplier is $15.

Required:

Question 1: What is the economic order quantity?

Question 2: What is the maximum inventory of IV solution bags?

Question 3: What is the center's average inventory of IV solution bags?

Question 4: How often must the center order (in days)?

Note: Please provide through step by step calculations.