For Problem 4, suppose that Noname has 23,000 DRAM chips in inventory. It anticipates receiving a lot of 3,000 chips in week 3 from another firm that has gone out of business.At the current time, Noname purchases the chips from two vendors,AandB.

A sells the chips for less, but will not fill an order exceeding 10,000 chips per week.

a. If Noname has established a policy of inventorying as few chips as possible, what order should it be placing with vendors A and B over the next six weeks?

b. Noname has found that not all the DRAM chips purchased function properly.

From past experience it estimates an 8 percent failure rate for the chips purchased from vendor A and a 4 percent failure rate for the chips purchased from vendor B. What modification in the order schedule would you recommend to compensate for this problem?