Answer Happy

2. Tom is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Tom's fastest-moving inventory item has a demand of 6,000 units per year. The cost of each unit is $150, and the inventory carrying cost is $12 per unit per year. The average ordering cost is $20 per order. This is a corporate operation, and there are 240 working days per year. 1) What is the EOQ? 2) What is the average inventory if the EOQ is true? 3) What is the optimal number of orders per year? 4) What is the optimal number of days in between any two orders? 5) What is the inventory management cost (annual cost of ordering and holding inventory)? 6) What is the total annual inventory cost, including the cost of the 6,000 units? 3. In an EOQ model, the annual ordering cost is $1,000. If the calculation is correct, what would be the most likely inventory holding cost per year? a) $500 b) $1,000 c) $1,500 D) $2,000