b

Exercise I. Forecasted sales level - 12100 units Average order costs per unit - 1600 USD per order with average order units 1100 Warehouse costs per unit - 16 USD; Purchase price - 570 USD; Average money market interest rate 9%; Time of one order from producer-4 days; Safety stock being maintained for 6 business activity days - Calculate total inventory costs; - Calculate total inventory cost using Economic Order Quantity and thus calculate: Number of orders Time of inventory equilibrium (frequency of deliveries) Total inventory costs Calculate alarm stock ; - Calculate total inventory costs when the firm can use price discount in the amount of 5 USD with purchases over 4000 units