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1) Appliance for Less is a local appliance store

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1) Appliance for Less is a local appliance store. It costs this store $21.62 per unit annually for storage, insurance, etc., to hold microwave in their inventory. Sales this year are anticipated to be 639 units. Each order costs $69. The company is using Economic Order Quantity model in placing the orders. What is the average inventory held during the year including safety stock if the store insists on a 3 days safety stock (assume 365 days a year)?

2) Cheeseburger and Taco Company purchases 14,922 boxes of cheese each year. It costs $14 to place and ship each order and $3.83 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders.

What is the annual total inventory management costs of cheese inventory.