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Question 3 A company manufactures five sizes of screwdrivers. Ordering costs and carrying costs are not known, but it is known that they are the same for each size. At present, each size is produced four times per year. If the demand for each size is as follows, calculate order quantities to minimize inventories and maintain the same total number of runs. Calculate the old and new average inventories. Is there any change in the number of orders per year? Item Annual Usage Present PresentO A New orders per Lot Sizel Size year Lot New Orders per = KO A year A N = A /Q $12,100 $8,100 $3,600 4 $1,600 5 $225 Totals Average inventory AD item Annual Usage Present orders per year Present Lot Size $12.100 $8 100 $3.600 $1,600 $225 $25,625 $3,025 00 110 $2.025 00 90 $900 00 60 $400 0040 $56 25 15 $6.406 25 315 $3 203.13 New Lot New Size Orders =KAD per year N = Ao/ 31.732 50 6 98 $1.417 50 571 $945 00 381 $630 00 254 $236 25 95 54.961 25 19.99 $2.480 63 Totals 20 Average inventory K = 315 - 20 = 15 75