Problem #4 A purchasing agent for a particular type of silicon wafer used in the production of semiconductors must decide among three sources. Source A will sell the silicon wafers for $2.5 per wafer, independently of the number of wafers ordered. Source B will sell the wafers for $2.4 each but will not consider an order for fewer than 3,000 wafers, and Source C will sell the wafers for $2.30 cach but will not accept an order for fewer than 4,000 wafers. (These conditions are summarized in the table below.) Assume a reorder cost of $100 and an annual requirement of 20,000 wafers. Assume a 20 percent annual interest rate for holding cost calculations. Table 1. Quantity discount in unit cost Source Unit cost Order quantity range A $2.5 No restriction $2.4 3000 SQ $2.3 4000 SQ B (a) Which source should be used, and what is the best order quantity of the selected source that minimizes. the total.cost? (b) If the replenishment lead time for wafers is 3 months, determine the reorder level (ROL) based on the on- hand level of inventory of wafers. Use the best in the question (0)