2. Suppose you are in charge of the inventory for a Home & Kitchen Appliances company....

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2. Suppose you are in charge of the inventory for a Home & Kitchen Appliances company. The recent demand for a type of table lamp has followed the following pattern: Week 1 2 3 4567 8 9 10 Demand 49 18 32 61|16|37|46|24 56 30 Based on previous experience, it is estimated that holding a lamp cost 20% of the unit cost per year. The lamps are purchased from the manufacturer for a wholesale price of $180 each. It costs them $300 to process an order and arrange delivery. There is a six-week lead time for delivery once the order is made. The company has a policy of maintaining a 99% customer service level. a. What should the inventory policy be (order quantity and reorder point (Note: Safety stock need to be included))? [1] b. The manufacturer has approached you with an offer to negotiate a price discount if you will order 500 lamps at a time and promised that they would be able to keep the purchase and shipping costs the same. What is the highest the wholesale price can be and still make the offer an attractive one financially? [1] 2. Suppose you are in charge of the inventory for a Home & Kitchen Appliances company. The recent demand for a type of table lamp has followed the following pattern: Week 1 2 3 4567 8 9 10 Demand 49 18 32 61|16|37|46|24 56 30 Based on previous experience, it is estimated that holding a lamp cost 20% of the unit cost per year. The lamps are purchased from the manufacturer for a wholesale price of $180 each. It costs them $300 to process an order and arrange delivery. There is a six-week lead time for delivery once the order is made. The company has a policy of maintaining a 99% customer service level. a. What should the inventory policy be (order quantity and reorder point (Note: Safety stock need to be included))? [1] b. The manufacturer has approached you with an offer to negotiate a price discount if you will order 500 lamps at a time and promised that they would be able to keep the purchase and shipping costs the same. What is the highest the wholesale price can be and still make the offer an attractive one financially? [1]