Reliant Auto estimates the annual demand for its newest model is 60,000 units, the cost of order preparations is $55,000, the inventory carrying cost per car per year is $5,000 and the order lead-time is 1 month. Reliant keeps 500 units of safety stock.
-What is the Economic Order Quantity?
-Approximately what is the order frequency?
-What is the demand during lead-time?
-What is the Maximum Inventory Level Reliant should have, assuming orders arrive on time and inventory is depleted as predicted?
-What is the Minimum Inventory Level should have, assuming orders arrive on time and inventory is depleted as predicted?
Show all work.