In class, we discussed the example of Eastern Electric (EE), a major manufacturer that buys 120,000 motors per year (365 days per year) from Westview Motors (WM) at $120/motor. Each motor averages a weight of 10 lbs. per unit. WM has just announced to EE that they will be implementing a temporal consolidation initiative and that, as a result, they will now need two days to ship their orders after they receive the order information from EE. In turn, EE has decided that they will now carry safety stocks equivalent to 25 percent of the average demand per motor during replenishment lead time. EE is also considering a new transportation proposal put forth by PM Railroad. According to this proposal, the in- transit time is guaranteed to be five days, EE will need to ship at least 300 cwt per load. PM Railroad will charge S5/cwt in transportation costs between WM and EE (FOB destination (WM owns the shipments in transit), freight prepaid and charged back). Based on these conditions:
What is the annual average cycle inventory amount carried by EE? If needed, please select the value that is closest to your estimation

a. 3,000 motors
b. 6,000 motors
c. 1.500 motors
d. 750 motors
e. 0 motors