Answer:
Check the explanation
Explanation:
Here, Cost of Inventory will be the average inventory cost for EOQ quantity = Holding cost per unit * EOQ/2
=$(0.02*2670) = $53.40
C. Average Inventory = EOQ/2 = 2670/2 = 1335
Therefore Average flow time = Average Inventory/ Demand = 1335/457 = 2.92 week
D. We know that EOQ is proportional to Demand^(1/2)
And, Average Flow time is directly and inversely proportional to EOQ and Demand respectively
Average Flow time is proportional to Demand^(1/2)/Demand = Demand ^(-1/2)
Therefore,
Initial Average Flow time/Current Flow time = Current Demand ^(1/2)/{Initial demand^(1/2)} ....[Ratio of the flow times = inverse ratio of the square root of their corresponding demands]
2.92/5= SQRT(Current Demand/457)
Current Demand = 156