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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 comma 1006,100 units per year. The cost of each unit is ?$104104?, and the inventory carrying cost is ?$99 per unit per year. The average ordering cost is ?$3131 per order. It takes about 55 days for an order to? arrive, and the demand for 1 week is 122122 units.? (This is a corporate? operation, and there are 250250 working days per? year).

ANSWER THE FOLLOWING:

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 the cost of 6,050 units?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92593500

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