Please show workings. Do not provide hand-written solutions. Refer to the formula below for finite replenishment (EOQ, variable, total cost etc.).

Formula

Activity 2.5 An Oximeter manufacturer purchases the displays used in the Oximeter from an overseas supplier. The supplier charges $12 per display and there is an ordering cost of $100 every time an order is placed to the supplier. The items take 3 weeks to arrive after the order is placed. The company is considering whether to make the displays in-house because of the uncertainties in shipment from overseas. The in-house production process for the displays is continuous, occurs at a finite rate and is non-stop throughout the year. Other information about the display production process is shown in Table 1. Where X is the last digit of your PI number. If your PI number is B1234567,X=7. (a) Determine the best order quantity the company should order from the supplier to minimise the annual inventory cost. What is the annual inventory cost if the company decides to purchase that quantity from the supplier? (b) If the company decides to make the displays in-house, solve for the optimal batch size? What is the optimal inventory cost? (c) Based on the annual inventory cost for the above cases, whether the company should continue purchasing from the supplier or start producing in-house. Table 2.2 Comparison of Finite and Instantaneous Replenishment Activity 2.5 An Oximeter manufacturer purchases the displays used in the Oximeter from an overseas supplier. The supplier charges $12 per display and there is an ordering cost of $100 every time an order is placed to the supplier. The items take 3 weeks to arrive after the order is placed. The company is considering whether to make the displays in-house because of the uncertainties in shipment from overseas. The in-house production process for the displays is continuous, occurs at a finite rate and is non-stop throughout the year. Other information about the display production process is shown in Table 1. Where X is the last digit of your PI number. If your PI number is B1234567,X=7. (a) Determine the best order quantity the company should order from the supplier to minimise the annual inventory cost. What is the annual inventory cost if the company decides to purchase that quantity from the supplier? (b) If the company decides to make the displays in-house, solve for the optimal batch size? What is the optimal inventory cost? (c) Based on the annual inventory cost for the above cases, whether the company should continue purchasing from the supplier or start producing in-house. Table 2.2 Comparison of Finite and Instantaneous Replenishment