solve question 2

With the growing demand for testing amid Covid-19, the RCAD reviews their order policy for testing kits. Currently, the testing kits are ordered at six-week intervals from the supplier. This ordering system began about five years ago because the supplier insisted on it. However, that supplier was bought out by another supplier from China about a year ago, and the six-week ordering requirement is no longer in place. Nonetheless, the RCAD had continued to use the six- week ordering policy. According to purchasing manager Khaled Ramadan, "Unless somebody can give me a reason for changing. I am going to stick with what we have been doing. I do not have time to reinvent the wheel." Further discussions with Khaled revealed a cost of $32 to order and receive a shipment of testing kits from the supplier. The RCAD uses 89 kits a week on average. Also, information from Maha Saleh, in Accounting, indicated a weekly carrying cost of $.08 for each testing kit. The supplier has been quite reliable with deliveries, orders are received five working days after they are faxed to the supplier. Khaled indicated that as far as he was concerned, lead-time variability is virtually nonexistent (so far!). . Would using an order interval other than every six weeks reduce costs? If so, what order interval would be best, and what order size would that involve? Make your recommendations. Assume that there may be a second wave of Covid-19, and the supplier from China may delay their delivery. Therefore, the RCAD may need to look for other local and international supplier options. What could be the criteria for selecting a new supplier? Make a list with justifications