A local ice cream shop sells 10,000 cones of vanilla-flavored ice cream each year. The cones are ordered from an outside supplier and it takes 5 days for each shipment of cones to arrive. Ordering costs are estimated at $15 per order. Carrying costs are $5 per cone per year. Assume that the ice cream shop is open 250 days a year.

a. What is the optimal EOQ for ice cream cones?

b. What is the total cost of ordering and carrying the ice cream cones?

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c. What is the maximum inventory of cones held in a given ordering cycle?

d. What is the average inventory held in a given ordering cycle?

e. What is the reorder point (ROP)?

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