Question: Consider a hardware supply warehouse that is contractually obligated to deliver 2 , 0 0 0 units of a specialized fastener to a localmanufacturing company

Consider a hardware supply warehouse that is contractually obligated to deliver 2,000 units of a specialized fastener to a localmanufacturing company each week. Each time the warehouse places an order for these items from its supplier, an orderingand transportation fee of $30 is charged to the warehouse. The warehouse pays $1.00 for each fastener and charges the localfirm $4.00 for each fastener. Annual holding cost is 25 percent of inventory value, or $0.25 per vear. Assume themanufacturing plant operates for 50 weeks a year
if the supplier only allows orders in thousands of units, then how much the warehouse manager need to order?
Compared with the optimal average cost in (1), what is the percentage of increase in this case?

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