Please answer question 7 and use the provided information to calculate Number 7

2 Inventory Cost and Production Cost A manufacturer of copy machines sells 12,000 units annually of its large office copier (Model X), and 15,000 units annually of its smaller office copier (Model Y), for a total of 27,000 units. Each printer has a unique component which holds the print cartridge. Currently, the total annual cost (that is, the total production cost plus total inventory cost) is $331,000. Management is considering a single component to replace the two different components currently used for the copiers. The specifications for the new component are: Fixed setup cost (8) $300.00 Manufacturing cost (c) $12.00 Holding cost (h) 25% of manufacturing cost 5. How many units per batch should the company produce? 6. Calculate the total inventory cost of the new component. 7. The operations manager claims there is a savings to be gained from using the new component since the company can pool the demand of the two products. Consider the total cost formula from class TC = IC + PC, where PC = c), which says that "total cost is equal to total inventory cost plus total production cost." Using this logic, is the operations manager's claim correct that there is a savings from using the new component? 2DS Units per batch should the company prodlerce can be calculated by using Economic order Quanisty Economic Batch Quantity (EBC) = DAnnctal Demand Se setup cost Cactit cost of manufacturing, Given Amocal demand 0-27000 Fixed setup cost s- $300 Manufacturing cost (c)= $ia. EBQ- 2x27000 x 200 25 SOX27000 11350000 - 367.12 units per (EBQ) = 367 Batch C 6) Total inventory.coost -c (9)+F C=umit cost ; Q=0xder Quantity - Fixed cost per order D-Annual demand. Total inventory cost = tax (364) + 300(07 27000 367 = 2202 +22070.84468 24272-64468 ~ 24272.8 Total inventory cost