Juneau, Inc. currently orders three items twice a month. These units are low value inventory and utilized

across many different product lines. The company carries the following Inventory:

Item Demand

A $5000$

B $2500$

C $500$

Reduce holding costs while keeping ordering costs constant?

a$.$ What is X for reducing holding costs $($X$)?$

b$.$ What is the new maximum quantity of the three inventory items $($Qnew$)?$

c$.$ What is the new number of orders per year $($Nnew$)?$

d$.$ Since HC $=$ Qavg$*$Ch and Qavg $=$ Q$/2,$ what will happen to the annual Holding Costs $($HC$)$ with your

Qnew $($as compared to the orginal Q$)?$ Increase or Decrease?