Problem $3(12$ points$)$

Stephanie Wong runs a small company and she wants to perform an inventory analysis on one of

her most popular products. Annual demand for this product is $5,000$ units; holding cost is $$40$ per

unit per year, fixed ordering costs for her company typically run $$60$ per order; and the average

lead time is $10$ days. Assume $365$ working days per year.

$($a$)$ What is the economic order quantity? $[3$ pts$]$

$($b$)$ What is the average inventory level? $[2$ pts$]$

$($c$)$ What is the optimal number of orders per year? $[2$ pts$]$

$($d$)$ What is the optimal number of working days between two consecutive orders $($i$.$e$.,$ the

reorder interval$)?[3$ pts $]$

$($e$)$ What is the total annual inventory cost $($holding cost $+$ fixed ordering cost$)?[2$ pts$]$