Question: Given information: - Annual Demand =1000 units - # days per year =365 - Ordering cost =$5/ order - Holding cost = $1.25/unit/year - Lead

Given information: - Annual Demand =1000 units -
Given information: - Annual Demand =1000 units - \# days per year =365 - Ordering cost =$5/ order - Holding cost = \$1.25/unit/year - Lead time =5 days - Unit cost =$12.50 a) Find the Economic Order Quantity (EOQ or Q)=2DS/H (1 point) b) Find the reorder point (R)=dL(1 point ) c) Find the Total Annual Cost (TC) =DC+QDS+2QH (1 point) d) Explain how this inventory model works in a sentence or two using the values you calculated for a ) and b ) above. Be specific. ( 2 points) e) If we added safety stock to this model, what would happen to: a. The EOQ (go up, down, or stay the same)? Why? (2 points) b. The R go up, down, or stay the same)? Why? (2 points) c. The Total Annual Cost go up, down, or stay the same)? Why? (2 Points)

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