Assignment Inventory Q1- A Company uses 12,000 components a year at a cost of 5 cents each. Order costs have been estimated to be $5 per order and inventory holding cost is estimated at 20% of the cost of a component per year. Note here that this is the sort of cheap item that is a typical non-JIT item. a) What is the EOQ? b) If orders must be made for 1, 2, 3, 4, 6 or 12 monthly batches what order size would you recommend and when would you order? i) Calculate the order interval in weeks. ii) Calculate the order quantity/month. iii) Then, calculate the order Q that must be made for 1, 2, 3, 4, 6 or 12 monthly batch and the total costs iv) Choose the best monthly batch. c) If the supplier offers the following quantity discount structure what effect will this have on the order quantity? And calculate the total costs of each Q. Order quantity Cost (per unit) 0-4,999 $0.05 5,000-9.999 $0.05 less 5% 10,000 --- 19,999 $0.05 less 10% 20.000 and above $0.05 less 15% For example, if we were to order 6000 units we would only pay 0.95 of the 6000 units, i.e. the discount would be given on the entire order