QUESTION FOUR (40 Marks) Instructions: Answer both Part A and B A. The Call-Us Plumbing Supplying Company stocks thousands of plumbing items sold to regional plumbers, contractors, retailers, Mr. Swartz, the firm's general manager, wonders how much money can be saved annually if EOQ were used instead of the firm's present rules of the thumb. He instructs Mary Ann Church, an inventory analyst, to conduct an analysis of one material only (Material # 3925, a brass valve) to see if significant savings might result from using the EOQ. Mary Ann develops the following estimates from accounting information: D 10,000 valves per year, Q = 400 valves per order (present order quantity), C $.40 per valve per year, and S = $5.50 per order EOQ.-524.4 Total Annual Stocking Costs (TSC) = 209.76 Required i. Calculate the New EOQ ii. Find the new total annual stock costs iii. Calculate the estimated savings B. The C.D. & F Retailing Company routinely reviews the inventory levels of its products on display monthly and places orders for these products, if needed, from its suppliers. The regional manager wonders if monthly reviews are optimal when considering both carrying costs and order costs. One product is selected to be the focus of investigation Goo Goo, a jarred baby-food cereal. The following information was developed for Goo Goo: D 29.385 jars per year. C+ 30 percent of acquisition cost, ac - $.29 per jar, and S $10.90 per order. Required a. How often should Goo-Goo be ordered? b. At the first review after T has been computed in Part a, if inventory level =985 jars. upper inventory target (including safety stock) = 3,220 jars, and expected demand during lead time = 805 jars, how many jars should be ordered