Question: 6 . 1 Suppose you purchase a part from a supplier for a unit cost of $ 4 with which you assemble red widgets. On
Suppose you purchase a part from a supplier for a unit cost of $ with which you assemble red widgets. On average, you use units of this part each year. Every time you order this particular part, you incur a sizable ordering cost of $ regardless of the number of parts you order. Your cost of capital is per year.
a How many parts should you purchase each time you place an order?
b To satisfy annual demand, how many times per year will you place orders for this part?
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