Question: Given the following data for a particular inventory item: Your usage of a given inventory item is 500 units per week. The ordering cost is

Given the following data for a particular inventory item: Your usage of a given inventory item is 500 units per week. The ordering cost is $40 per order, and the carrying costs are one cent per unit each week. It takes three weeks to receive an order, and the price of the item itself is 50 cents per unit.

Please show the solutions used to find the answers.

1. What is the economic order quantity for this item?

2. What is the reorder point

3. What is the average inventory level?

4. What are average weekly ordering costs?

5. What are average weekly carrying costs?

6. What are average weekly total costs, excluding the cost of the inventory item?

7. What are the average weekly total costs, including the cost of the inventory item?

8. What is the reorder point if safety stock is kept at 250 units?

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