computer$-$supply mail$-$order house mail$-$order house has a memory chip in

inventory that it sells to customers around the country. A Japanese manufacturer supplies the item

using airfreight. Assume the company operates $52$ weeks a year. It has the following

characteristics:

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Average annual demand $=3,200$ units

Replenishment lead time $=1\mathrm{.}5$ weeks

Carrying cost $=15\%$ per year

Purchasing price, delivered $=$$$55$ per unit

Procurement ordering cost $=$ $$35$ per order

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a$.$ Design a reorder point method of control for this item.

b$.$ What are the annual ordering and annual carrying costs if your design is used?

Problem $2.$ Demand for a certain type of radial tires at a tire company is $800$ units per month.

Each tire costs the company $$80.$ Ordering costs are $$75,$ and the annual carrying costs are $20$

percent of the purchase price. Lead time is $5$ days and assume the company operates $288$ days a

year.

$1.$ How many tires should the manager order in each lot $($EOQ$)?$

If EOQ is used as the order quantity $($Q$),$ answer the following questions:

$2.$ What is the company's average inventory of this tire?

$3.$ How often will an order be placed $($length of order cycle$)?$

$4.$ How many times per year will an order be placed?

$5.$ How much does the company spend annually on ordering costs?

$6.$ How much does the company spend annually on holding $($carrying$)$ costs?