Question: Hayes Electronics in Problem 1 assumed with certainty that the ordering cost is $ 4 5 0 per order and the inventory carrying cost is
Hayes Electronics in Problem assumed with certainty that the ordering cost is $ per order and the inventory carrying cost is $ per unit per year. However, the inventory model parameters are frequently only estimates that are subject to some degree of uncertainty. Consider four cases of variation in the model parameters: a Both ordering cost and carrying cost are less than originally estimated, b both ordering cost and carrying cost are higher than originally estimated, c ordering cost is higher and carrying cost is lower than originally estimated, and d ordering cost is lower and carrying cost is higher than originally estimated. Determine the optimal order quantity and total inventory cost for each of the four cases. Prepare a table with values from all four cases and compare the sensitivity of the model solution to changes in parameter values.
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