Insurance company chain with central inventory operation

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Reference no: EM131440208

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 5,750 units per year. The cost of each unit is $104 and the inventory carrying cost is ?$88 per unit per year. The average ordering cost is ?$31 per order. It takes about 55 days for an order to? arrive, and the demand for 1 week is 115 units.? (This is a corporate? operation, and there are 250 working days per? year).

?a) What is the? EOQ?

211211

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

?b) What is the average inventory if the EOQ is? used? units ?(round your response to two decimal? places)

211/2 is the wrong answer

c) what is the optimal number of order per year

d) what is the optimal number of days between any two order.

e) what is the annual cost of ordering and holding inventory

f) what is the total annual inventory cost, including the cost of the 5750 units.

Reference no: EM131440208

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