$4\mathrm{.}1\mathrm{.}1.$ To minimize cost, how many units should be ordered each time an order is placed?

$(3$ marks$)$

$4\mathrm{.}1\mathrm{.}2.$ How many orders per year are needed with the optimal policy?

$(2$ marks$)$

$4\mathrm{.}1\mathrm{.}3.$ Suppose that MC Electronics wants to change its ordering policy such that exactly $1500$ units are

$(4$ marks$)$

ordered each time an order is placed. For this new ordering policy $($ of $Q=1500)$ to be optimal, determine what the setup cost would have to be$.$

$4\mathrm{.}2.$ Arthur Phosa is the operations manager of AMF&M Inc., a manufacturer of metal parts. AMF&M supplies $100000$ wheel bearings each year to WPT Enterprises, a larger assembly Plant. This supply arrangement has been stable for several years. Setup cost for AMF&M is R$800,$ and holding cost is R$1\mathrm{.}20$ per wheel bearing per year. AMF&M can produce $500$ wheel bearings per day. WPT Enterprises is a just$-$intime manufacturer and requires that $50$ bearings be shipped to it each business day.

$4\mathrm{.}2\mathrm{.}1.$ What is the optimum production quantity?

$(4$ marks$)$

$4\mathrm{.}2\mathrm{.}2.$ What is the total setup and holding costs for AMF&M$?$

$(5$ marks$)$

$4\mathrm{.}2\mathrm{.}3.$ How many production runs of wheel bearings will AMF&M have in a year?

$(2$ marks$)$