Question: AV City (Problem 13.1) assumed with certainty that the ordering cost is $625/order and the inventory carrying cost is $130/unit/ year. However, the inventory model

AV City (Problem 13.1) assumed with certainty that the ordering cost is $625/order and the inventory carrying cost is $130/unit/ year. However, the inventory model parameters are frequently only estimates that are subject to some degree of uncertainty.

Annual Demand =1500

Consider this case of variation in the model parameters as follows:

(a) Both ordering costs and carrying costs are 10% less than originally estimated.

Determine the optimal order quantity and total inventory cost.

PLEASE SOLVE MANUALLY AND IN EXCEL AS WELL, SHOW FORMULAS IN EXCEL.

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