Question: Question 2 (6 points) Suppose you are responsible for managing inventory of an item for which the weekly demand is 500 units. The cost to

Question 2 (6 points) Suppose you are responsible

Question 2 (6 points) Suppose you are responsible for managing inventory of an item for which the weekly demand is 500 units. The cost to process and ship an order is a fixed $75. Inventory holding costs are charged at 15% of the variable purchasing cost per unit per year (assume a 50 week year). There are two vendors who can supply this item; both charge the same price of $4 per unit. a) (2 points) What is your (ideal) optimal order quantity? How often should you place your or- der with this order quantity? b) (4 points) However, both vendors who can supply this item have their own restrictions on ordering. Vendor A ships items only once every 4 weeks. Vendor B accepts only orders of 3,000 units or more. Which vendor would you choose? Why? Show calculations to support your recommendation

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