Question Three (25 marks) a) Explain the reasons for keeping inventory by organizations despite the risks and costs involved (5 marks) b) State the assumptions of economic order quantity (EOQ) (5 marks) c) Explain the types of inventory costs (3 marks) d) Handshake electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. One of the components has an annual demand of 250 units and this is constant throughout the year. Currying cost is estimated to be 1 USD per year, and the ordering cost is 20 USD per order Required: i. To minimize cost, how many units should be ordered any time the order is placed? (3 marks) ii. How many orders are needed per year are needed with the optimal policy? (3 marks) iii. What is the inventory if costs are minimized? (3 marks) iv. Suppose the ordering cost is not 20 USD, and Handshake has been ordering 150 units each time and order is placed. For this order to be optimal, what would be the correct ordering cost