Question content area

Part $1$

Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation.$$ Thomas's fastest$-$moving inventory item has a demand of

$5$ comma $7505,750$

units per year. The cost of each unit is

$$$$9797,$

and the inventory carrying cost is

$$$$1111$

per unit per year. The average ordering cost is

$$$$3131$

per order. It takes about

$55$

days for an order to$$ arrive, and the demand for $1$ week is

$115115$

units.$($This is a corporate$$ operation, and there are

$250250$

working days per$$ year$).$

Part $2$

$$a$)$ What is the$$ EOQ?

$180\mathrm{.}03180\mathrm{.}03$

units $($round your response to two decimal$$ places$).$

Part $3$

$$b$)$ What is the average inventory if the EOQ is$$ used?

$90\mathrm{.}0190\mathrm{.}01$

units $($round your response to two decimal$$ places$).$

Part $4$

$$c$)$ What is the optimal number of orders per$$ year?

$31\mathrm{.}9431\mathrm{.}94$

orders $($round your response to two decimal$$ places$).$

Part $5$

$$d$)$ What is the optimal number of days in between any two$$ orders?

$7\mathrm{.}837\mathrm{.}83$

days $($round your response to two decimal$$ places$).$

Part $6$

$$e$)$ What is the annual cost of ordering and holding$$ inventory?

$$$$1980\mathrm{.}281980\mathrm{.}28$

per year $($round your response to two decimal$$ places$).$

Part $7$

$$f$)$ What is the total annual inventory$$ cost$,$ including the cost of the

$5$ comma $7505,750$

$$units$?$

$$$enter your response here

per year $($round your response to two decimal$$ places$).$