QUESTION 3 The demand for a component at a manufacturing firm is assessed to be a constant 3000 units per month. The firm pays RM8 for each component to the supplier. The annual holding cost of each component is 7.5% of the unit cost of purchasing the component. The administrative cost of placing an order is RM50. Assume that there are no shortages and all units ordered arrive on the same day. a) Determine the economic order quantity. (3 marks) b) Calculate the annual total inventory cost associated with the above order size. (3 marks) c) Calculate the time between orders. (1 mark) d) For the coming year, the manufacturing firm is considering two options. Option 1: take advantage of a 4% discount on minimum orders of 4000 units per order offered by the current supplier. Option 2: purchase from another supplier at the cost of RM7.50 each but with no discount. Determine the best option for the manufacturing firm. What should be the optimal order quantity? (8 marks)