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The Gentry Garden Center sells 88,000 bags of lawn fertilizer annually. The optimal safety stock (which is on hand initially) is 1,000 bags. Each bag costs the firm $1.4, inventory carrying costs are 20%, and the cost of placing an order with its supplier is $14.
Question 1: What is the Economic Ordering Quantity? Round your answer to the nearest whole number.
Question 2: What is the maximum inventory of fertilizer?
Question 3: What will be the firm's average inventory?
Question 4: How often must the company order? Round your answer to the nearest whole number. Use 365-day year.
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