Question: 1 2 . 1 4 Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation.
Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastestmoving inventory item has a demand of units per year. The cost of each unit is $and the inventory carrying cost is $ per unit per year. The average ordering cost is $ per order. It takes about days for anorder to arrive, and the demand for week is units. This is a corporate operation, and there are 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 the cost of the units?
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