Question 3(30 marks) The Economic Order Quantity is a model used to manage inventory and to decide how much of any particular item to order when stocks need to be replenished. This model determines the optimal order quantity in terms of minimizing the total inventory costs (a) Explain with the help of a graph, the Economic Order Quantity Model in inventory management? (15 Marks) (b) XYZ company manufactures mobile phones and have a strong global presence in every part of the world. The Operations Manager of XYZ wants to determine the Economic order quantity of batteries to buy for their phone with the minimum cost. The annual consumption of batteries is 50 000 units and every time the Manager places an order with the local supplier, the administrative cost is Rs 1000 and other ordering cost is Rs 150. The supplier sells a battery at a unit price of Rs 200. The store manager at XYZ has estimated that the carrying cost of a battery is 10% of unit cost. Calculate the (1) Economic Order Quantity (4 marks) (2) Number of orders in a year of 365 days (3 marks) (3) The time interval between orders (3 marks) (4) The total annual cost