Question

Economic Ordering Quantity (EOQ). The Gentry Garden Center sells 100,000 bags of lawn fertilizer annually. The...

Economic Ordering Quantity (EOQ). The Gentry Garden Center sells 100,000 bags of lawn fertilizer annually. The optimal safety stock (which is on hand initially) is 1,500 bags. Each bag costs the firm $2.00, inventory carrying costs are 15%, and the cost of placing an order with its supplier is $15. (4 pts)

a. What is the EOQ?

​​​​​​​b. What is the maximum inventory of fertilizer? ​​

c. What will be the firm’s average inventory?

​​​​​d. How often must the company order?

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