An increase in Economic Order Quantity will lead to Increase in Ordering cost Reduction in inventory carrying cost Reduction in ordering cost and increase in inventory carrying cost Increase in ordering cost and reduction in inventory carrying cost

Explain the differences between inventory carrying costs and ordering costs.

A pharmacist is trying to determine the inventory order and stock levels for a particular drug. The following information is available about the drug. Demand (D) 85 tablets/week Working weeks per year 52 weeks Unit holding cost per year (H) $6 Order cost (S) $44/order Standard deviation of weekly demand (sd) 15 tablets Lead time (L) 2 weeks Desired cycle service level 95% If the pharmacist uses the continuous review (Q) system to control the inventory of the drug, what would be the order quantity and reorder point? If the pharmacist uses the periodic review (P) system to control the inventory of the drug, what would be the review interval and target inventory level? (Hint: Use the EOQ model to derive the review interval P)

Jean-Ma rie Bourjolly's restau rant has the followinginventory items that it orders on a weekly basis:                                                                                           a) Which is the most expensive item, using annual dollar volume?b) Which are C items?c) What is the annual dollar volume for all 20 items?