. . . 2) A FIRM IS CONSIDERING CHANGING HOW IT PLACES ORDERS WITH A SUPPLIER TO TAKE ADVANTAGE OF AVAILABLE QUANTITY DISCOUNTS. THE DETAILS ARE BELOW: 60,000 units (D) are required over the 360-day planning period (D) and are used at a constant daily rate. Payment is due 25 days after order delivered. Inventory pricing (C) if order size is: 000 0-9,999 $6.00/unit 000 10,000 - 19,999 $4.90 /unit 000.000 TOES 20,000+ edeo $3.75/unit 000 12 000 OS Ordering Costs (OC) are $100/order.00 AS 000 Holding Costs (HC) are $2.15/unit based on average inventory.GOST Ordering and Holding Costs are paid at end of the production period. The cost of capital is 16%. 000 000 eres losestereo 000 S 2 000 It is considering three options (Q): 0001 2000 A 0.a 101 SO Current Inventory System - 4,000 units per order 000 D.OAS TOE Alternative Inventory System 'A' -10,000 units per order LOADS SI Alternative Inventory System 'B' -20,000 units per order 0.385 Ite SOSO 000 2000 O.SE a. Complete the following chart to determine which inventory system has the lowest Total Cost excluding the cost of capital. . Option Inventory # Orders Order Size Cost (CXD) (DO Days Between Ordering Cost Holding Costs Orders (Plaring COC (D01 HC (2) Period Onders Total Cost Existing 'B' b. Complete the following chart to determine which inventory system has the lowest PV, i.e. the lowest total cost after taking into consideration the cost of capital. Note: The information in the first four columns is the same as the previous chart. However, the timing of each order is different so the details of each order is needed to calculate the present value equivalent. The work is completed for you for the existing system and System 'A'. Please complete the chart for System 'B'. TIHT VO2 10 Existing System Order Delivered Number att = 1 0 2 24.0 3 48.0 4 72.0 5 96.0 6 120.0 7 144.0 8 168.0 9 192.0 10 216.0 11 240.0 264.0 13 288.0 14 312.0 15336.0 Ordering Costs Holding Costs Order Inventory Payment PVF PV Quantity Cost Due at t= 4,000$ 24,000 25 0.98915989 $ 23,740 4,000 $ 24,000 49 0.97897221 $ 23,495 4,000 $ 24,000 730.96899225 $ 23,256 4,000 $ 24,000 97 0.95921371 $ 23,021 4,000 $ 24,000 121 0.94963055 $ 22,791 4,000 $ 24,000 145 0.94023699 $ 22,566 4,000 $ 24,000 169 0.93102745 $ 22,345 4,000 $ 24,000 193 0.92199656 $ 22,128 4,000 $ 24,000 217 0.91313920 $ 21,915 4,000 $ 24,000 (241 0.90445039 $ 21,707 4,000 $ 24,000 265 0.89592538 $ 21,502 4,000 $ 24,000 289 0.88755958 $ 21,301 4,000 $ 24,000 313 0.87934856 $ 21,104 4,000 $ 24,000 337 0.87128807 $ 20,911 4,000 $ 24,000 361 0.86337402 $ 20,721 1,500 360 0.86370090 $ 1,296 4,300 360 0.86370090 $ 3,714 $ 337,513 TOTALS $365,800 System A Order Number PVF PV 1 2 3 Delivered att = 0 60 120 180 240 300 Order Inventory Quantity Cost 10,000 $ 49,000 10,000 $ 49,000 10,000 $ 49,000 10,000 $ 49,000 10,000 $ 49,000 10,000 $ 49,000 Payment Due attu 25 85 145 205 265 325 0.98915989 $ 48,469 0.96407818 $ 47,240 0.94023699 $ 46,072 0.91754651 $ 44,960 0.89592538 $ 43,900 0.87529976 $ 42,890 4 5 6 Ordering Costs Holding Costs $ 600 $ 10,750 $ 305,350 360 360 0.86370090 $ 518 0.86370090 $ 9,285 $ 283,333 TOTALS System B Order Number Delivered at t = Order Quantity Inventory Cost Payment Due at t = PVF PV 1 WN Ordering Costs Holding Costs