What is the annual cost of ordering and holding inventory


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 ?$96?, and the inventory carrying cost is ?$99 per unit per year. The average ordering cost is ?$31 per order. It takes about 55 days for an order to? arrive, and the demand for 1 week is 122 units.? (This is a corporate? operation, and there are 250 working days per? year). ?a) What is the? EOQ? 204.99 units ?(round your response to two decimal? places). ?b) What is the average inventory if the EOQ is? used? 102.49 units ?(round your response to two decimal? places). ?c) What is the optimal number of orders per? year? 29.75 orders ?(round your response to two decimal? places). ?d) What is the optimal number of days in between any two? orders? 8.40 days ?(round your response to two decimal? places). ?e) What is the annual cost of ordering and holding? inventory? ?$ 1844.66 per year ?(round your response to two decimal? places). ?f) What is the total annual inventory? cost, including the cost of 6,100 ?units? ?$ nothing per year ?(round your response to two decimal? places).

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