# AV City (Problem 13-1) assumed with certainty that the ordering cost is $625/order and the inventory carrying ## Question: AV City (Problem 13-1) assumed with certainty that the ordering cost is$625/order and the inventory carrying cost is \$130/unit/year. However, the inventory model parameters are frequently only estimates that are subject to some degree of uncertainty. Consider four cases of variation in the model parameters as follows:
(a) Both ordering cost and carrying cost are 10% less than originally estimated;
(b) Both ordering cost and carrying cost are 10% higher than originally estimated;
(c) Ordering cost is 10% higher and carrying cost is 10% lower than originally estimated;
(d) Ordering cost is 10% lower and carrying cost is 10% higher than originally estimated.
Determine the optimal order quantity and total inventory cost for each of the four cases. Prepare a table with values from all four cases and compare the sensitivity of the model solution to changes in parameter values.

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