Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastestmoving inventory item has a demand of 5,800 units per year. The cost of each unit is $97, and the inventory carrying cost is $11 per unit per year. The average ordering cost is $31 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 116 units. (This is a corporate operation, and there are 250 working days per year). 1.) What is the EOQ? ____ units (round your response to two decimal places).
2.) What is the average inventory if the EOQ is hsed? ______ units (round your response to two decimal places).
3.) What is the optimal number if orders per years? ________ orders (round your response to two decimal places).
4.) What is the optimal number of days in between any two orders? ______ days (round your response to two decimal places).
5.) What is the annual cost of ordering and holding inventory? $______ per year (round your response to two decimal places).
6.) What is the total annual inventory cost, including the cost of the 5,800 unit? $_____ per year (round your response to two decimal places).