use the centroid method

point) Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company 5 chain with a central inventory operation. Thomas fastest-moving inventory item has a demand of 7,000 units per year. The cost of each unit is $30 and the inventory carrying cost is $16 per unit per year. The average ordering cost is $50 per order. It takes about 4 days for an order 9 to arrive. The standard deviation of daily demand is 6 and the firm operates 350 days per year. 1 05. Compute the EOQ and annual inventory cost including the purchase cost. 13 06 41 65 a. What is the reorder point if the firm wants to satisfy a 90 percent probability of not stocking out during the lead time? b. What is the safety stock? Problem 3 (Use two digits after decimal point) DM Office Products (DMOP) is a wholesale supplier of office products with one facility Pennsylvania. It has decided to build a new distribution warehouse in the state of New York to help serve the growing demand in that market. It has six major customers located in New York City, Buffalo, Rochester, Syracuse, Albany, and Mount Vernon. Though New York City is the largest market, it also has the greatest competition and DMOP is not a major player there. When DMOP ships an order to a customer, it uses its own small fleet of two trucks to deliver. So the cost of delivery is essentially the same for a full or partially full truck. The expected number of annual shipments to each city and their coordinates on an X Y grid are shown in the following table. X- Y- coordinates 52 City Albany Buffalo Mount Vernd NY City Rochester Syracuse coordinates 1480 178 320 2480 680 1644 440 386 52 464 386 1357864 Number of shipments 148 50 68 80 186 84 712676 and for the new warehouse for DMOP