The Garden Center sells 90,000 bags of fertilizer annually. The optimal safety stock (initially) is 1,000 bags. Each bag costs the firm $1.50, inventory carrying costs are 20%, and the cost of placing the order with its supplier is $15.
a) What is the economic ordering quantity? ?
b) What is the maximum inventory of ferilizer?
c) What will be firm's average inventory?
d) How often must the company order?