The demand for E-Chupetin47 is very stable at 7900 units per month with virtually no variability. BabyGear pays $20 for each pacifier, and sells each unit for $35. The annual holding rate for these pacifiers is 20%, and the administrative cost associated with placing an order is $350. The company is currently ordering exactly the monthly demand, 7900 units of E-Chupetin47, the first day of each month.

Assume no lead time. Assume 52 weeks per year.

1)What is the current total annual relevant cost (ordering+holding costs) for E-Chupetin47?

2.1)What would be the optimal order quantity for E-Chupetin47?

2.2)What would be the time between orders for this optimal policy (in weeks)?

2.3)What would be the total annual relevant cost associated to this optimal policy (ordering+holding costs)?

3.This new system would automate manual tasks and reduce the administrative cost of placing an order to $200. What would be the impact of implementing this ordering system on the optimal policy thatcalculated in Question 2?

3.1)Optimal order quantity...

3.2)Purchasing cost...

3.3)Ordering cost...

3.4)Holding cost...

4.The supplier for E-Chupetin47 is working on a new line of pacifiers and is offering the E-Chupetin47 at a discount rate of $18 only during the current month.

they should order at the discount rate? If so, how many units should they order?