Topic is Inventory Management.Kindly solve all 4. A manager receives a forecast for next year. Demand is projected to be 600 units for thefirst half of the year and 900 units for the second half. The monthly holding cost is $2 perunit, and it costs an estimated $55 to process an order.a. Assuming that monthly demand will be level during each of the six-month periods covered bythe forecast (e.g., 100 per month for each of the first six months), determine an order size thatwill minimize the sum of ordering and carrying costs for each of the six-month periods.b. Why is it important to be able to assume that demand will be level during each six-monthperiod?c. If the vendor is willing to offer a discount of $10 per order for ordering in multiples of 50 units(e.g., 50, 100, 150), would you advise the manager to take advantage of the offer in either period?If so, what order size would you recommend?

Given- The demand for the first half of the year (d1) = 600 units The demand for the second half…

Answered: 4. A manager receives a forecast for…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter7: Nonlinear Optimization Models

Section: Chapter Questions

Problem 56P

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