1 P301 - Problem 9 3 A large hotel chain buys its cleaning supplies in bulk from a national vendor. The hotal purchasing manager currently orders a multi-purpose cleanser used to clean the guest bathrooms in quantities of 6,000 gallons at a time. She is considering changing the order quantity to the EOQ. The manager has collected the data in the table below. Use the data to answer questions a-d below. The hotel is open 365 days out of the year. 2 Inventory Information for Shower Cleanser 4 The Cost of a Gallon of the Cleanser $9.95 5 Annual Holding Cost (as a % of Cost) 18% 6 Cost to place an Order $15.00 7 Average Daily Demand (in gallons) 1000 8 Current Order Quantity 6000 9 a) What is the EOQ for the cleanser? 10 b) What would the annual ordering cost be under the EOQ? 11 c) What would the annual holding cost be under the EOQ? 12 d) How much money would the company save annually if it switched to the EOQ? 13 14 15 16 17 18 19 20 21 22