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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 a demand of 6,100 units per year. The cost of each unit is $102?, and the inventory carrying cost is $8 per unit per year. The average ordering cost is ?$31 per order. It takes about 5 days for an order to? arrive, and the demand for 1 week is 122 units.? (This is a corporate? operation, and there are 25 working days per? year).

A) What is the EOQ?

B) What is the average inventory if the EOQ is used?

C) What is the optimal number of orders per year?

D) What is the optimal number of days in between any two orders?

E) What is the annual cost of ordering and holding inventory?

F) What is the total annual inventory cost, including cost of the 6,100 units?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92176743

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