3 Consider the exchange surface in Figure 11. The current inventory policy has yielded 3,586 orders per

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3 Consider the exchange surface in Figure 11. The current inventory policy has yielded 3,586 orders per year, an AII of $1,367,000, and 0.89% shortages.

a Without changing orders per year and AII, by how much can shortages be improved?

b If AII and shortages are maintained at current levels, by how much can orders per year be reduced?

c If shortages and orders per year are maintained at current levels, by how much can AII be reduced?

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