2. A company stocks an item whose average sales volume is 1,000 units/year. The item has a unit cost of $5/unit. The com

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2 A Company Stocks An Item Whose Average Sales Volume Is 1 000 Units Year The Item Has A Unit Cost Of 5 Unit The Com 1 (65.93 KiB) Viewed 9 times

2. A company stocks an item whose average sales volume is 1,000 units/year. The item has a unit cost of $5/unit. The company's current operating policy is to replenish the inventory twice a year, and it yields an average cycle stock of 300 units/year. (a) Develop an exchange curve for total average cycle stock in $ versus total number of replenishments per year under an EOQ strategy. (b) Plot the current operating position on the graph. (c) For what values of K/i, the EOQ strategy would produce an improvement in both directions?