Question: Southeastern Bell (SEB) stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,000

Southeastern Bell (SEB) stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,000 units. Southeastern estimates its annual holding cost for this item to be $25 per unit. The cost to place and process an order from the supplier is $75. The company operates 300 days per year, and the lead time to receive an order from the supplier is 2 working days.

a. What is the EOQ?

b. What is the average inventory if the EOQ is used?

c. What is the optimal number of orders per year?

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

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

f. SEBs current policy is to order 1200 units each month; How much does it save or lose by switching to the policy in (a)?

(Please show excel functions)

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