Chapter 4: Tyler decided to open a bakery because everyone he knew told him that his baked goods were "out of this world." He had a little bit of a business school background because he got his Bachelor's from SPS at UIW recently. He remembered his teacher telling him that inventory models can be used for both the raw materials as well as the finished products for a business like his. So, he decided to see if he could use the basic EOQ model for identifying how much quantity to order of raw materials such as eggs, flour, sugar, etc. To get started, he decided to create a model for flour based on the information he had on hand regarding potential costs as follows:- Usage per month 100 lbs- Purchase cost $1 per lb.- Order cost $10.00 per order sent- Annual Holding Rate 10% of purchase price per lb.- 52-week year 300 working days per year- Lead time 2 daysFill in the following table based on this information:---**Optimal Inventory Policy**| | ||-----------------------------|----------------|| Economic Order Quantity Q* | __________ lbs.|| Annual Inventory Holding Cost H | __________ dollars || Annual Ordering Cost O | __________ dollars || Total Annual Cost TC | __________ dollars || Maximum Inventory Level Q | __________ lbs. || Average Inventory Level Q/2 | __________ lbs. || Reorder Point r | __________ lbs. left || Number of Orders Per Year (D/Q*) | __________ || Cycle Time (Days) T | __________ days |---Please fill in the values based on the provided information to complete the EOQ model calculations.

The EOQ model expects that request is steady, and that stock is exhausted at a proper rate until it arrives at nothing. By then, a particular number of things show up to return the stock to its starting level. Since the model accepts prompt renewal, there are no stock deficiencies or related expenses.Calculations- Annual Demand 1200 lbs Purchase cost 1 per lb ordering cost 10 per order holding cost per unit per annum 0.1 LT 2 days EOQ 490 Annual inventory holding cost 24.49 Annual ordering cost 24.4949 annual purchase cost 1200 total annual cost 1248.99 maximum inventory level 490 average inventory level 245 reorder point 8 no of orders per year 2.4 Cycle time 122 days Formula Used- B C D Annual Demand =100*12 lbs Purchase cost 1 per lb ordering cost 10 per order holding cost per unit per annum =C4*0.1 LT 2 days EOQ =SQRT((2*C3*C5)/C6) Annual inventory holding cost =(C9/2)*C6 Annual ordering cost =C5*(C3/C9) annual purchase cost =C3*C4 total annual cost =C10+C11+C12 maximum inventory level =C9 average inventory level =C14/2 reorder point =(C3/300)*C7 no of orders per year =(C3/C9) Cycle time =300/C17 days