Question: Inventory Problem.(7 marks) At small distribution company, the controller was advocating the use of EOQ system to identify inventory levels for each item. Suppose that

Inventory Problem.(7 marks) At small distribution company, the controller was advocating the use of EOQ system to identify inventory levels for each item. Suppose that for each item, values of Demand (D. Lead Time (L). Holding Cost (h) and Ordering cost (S) can be accurately estimated For a specific sem. Demand random and normally distributed. Demand mean (average) is 6000 units per year and standard deviation of demand per day is 20 units. It costs $40 to place an order and bolding cost is $5 per unit per year. Lead time is estimated as 7 days. The company aims to maintain 9896 service level (tez-2). Solve the following questions and show your detailed calculation steps . What is the economic order quantity (E0Q/? (1.5 marlos) it. What shall be the annual ordering costs? (1.5 marks) How much safety stock the compasy should carry? (15 marks) What is the reorder point? (1.5 marks) V. Write the inventory policy in this case. (1 mark) D Q TC = DC + S + H Q 2 2DS EOQ = Q = H Activate Windows Go to Settings to activate Window

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