Battery Wholesale, Inc., purchases batteries for $14.00 each, and it cost $11.00 to process an order. The company sells about 12,000 of a particular type of battery per year at a uniform rate. The company is open 5 days a week for 52 weeks per year with the exception of six holodays a year. The order lead time is 3 days, and the company wants to have an average of 2 days' sales on hand as safety stock when a new order is scheduled to arrive. The holding cost is estimated to be 24 percent of the item cost per year.
(a). Determine the EOQ
(b). Determine the expected level of maximum inventory.
(c). Determine the reorder level.
(d). Determine the average inventory level.
(e). Determine the average annual cost to hold inventory.