Question: An engineer has decided to pursue ordering option for a particular item on an as needed basis as oppose to stocking it. To stock the

An engineer has decided to pursue ordering option

An engineer has decided to pursue ordering option for a particular item on an as needed basis as oppose to stocking it. To stock the item, inventory inspection costs $500 annually. The cost to place an order is estimated at $125. For the ordering option, there is an additional $85 special delivery charge per order. Demand for the $20 item is 2,300 units per year. The annual holding cost rate is 40% of the item price. a) Calculate range of the order quantity that will make it economical to order this item every time. b) If the engineer decides to stock the item what is the order quantity that is economical

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