Question: Problem 1 (a to b: 50 points) A company will begin stocking remote control devices. Expected annual demand is 16000 units. Ordering cost is $20

Problem 1 (a to b: 50 points) A company will begin stocking remote control devices. Expected annual demand is 16000 units. Ordering cost is $20 and annual holding cost is $4 per unit. Lead time is 2 days and there are 250 working days per year.

a) (34 points) What is the penalty the company pays if the current ordering policy is to order 800 units?

b) (16 points) If the optimal ordering policy is chosen what would be the average inventory, cycle time, reorder point, and the average number of orders per year?

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