1. A company wishes to establish the appropriate inventory policy for the following 4 products in its supply catalog by different suppliers:

Product

1 2 3 4

Annual demand (units) 1,000 5,000 10,000 8,000

Order cost ($ / lot) $ 6 $ 10 $ 10 $ 8

Unit cost ($ / und) $ 10 $ 3 $ 5 $ 2

Warehouse space per unit 5.0 ft2 1.0 ft2 1.0 ft2 1.5 ft2

The company states that the cost of maintaining inventory is based on an annual capital cost of 10%. In addition, it is specified that the inventory management model is of the EOQ type. a) Determine the optimal policy for each of the products without space restrictions. Q * = [110 | 577 | 632 | 800] b) What is the cost of establishing these policies independently? Total Cost: $ 91,759.0 c) Determine the optimal policy for each of the products if the company establishes a maximum limit of 5,000 ft2 in the allocation of its input warehouse. Constraint = 2961 ft2, therefore the independent solution is optimal: Q * = [110 | 577 | 632 | 800] d) What is the cost of establishing the space restriction to your warehouse? Total Cost: $ 0 (additional to current)

Please show procedure.