Question: Given the following information, formulate an inventory management system. The item is demanded 365 days a year. Item cost $ 5.00 Order cost $ 80.00

Given the following information, formulate an inventory management system. The item is demanded 365 days a year. Item cost $ 5.00 Order cost $ 80.00 Annual holding cost (%) 35 % of item cost Annual demand 9,000 Standard deviation of daily demand 7 per day Lead time 9 days Service level 95 % a) [2 points] Determine the order quantity and reorder point. Optimal order quantity (Qopt) = Reorder point (R) = b) [1 point] Determine the annual total cost (TC). Annual Total Cost =

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