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2. An auto manufacturer uses 500 tons of steel per day. The company pays $1,100 per ton of steel purchased, and each order incurs a

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2. An auto manufacturer uses 500 tons of steel per day. The company pays $1,100 per ton of steel purchased, and each order incurs a fixed cost of $2,250. The holding cost is $275 per ton of steel per year. (a) Using the EOQ model, calculat|e the optimal order quantity. (b) What is the optimal reorder interval that corresponds to the above order quantity? (c) What is the average total cost per year that the company would incur if they use the EOQ? (d) Now suppose that the supplier can only supply the steel in increments of 3000 tons. What order quantity should the company use and how much more does that cost them in total inventory costs annually? (e) Now suppose that the suppler can supply in any quantity as long as it is above 2000 tons. What order quantity should the company use in this case? How much more is the total cost in this case in comparison to using the EOQ value? (f) Now suppose that the company decided that they can only deliver every other week, on Mondays since one of their drivers quit the job. Note that this means that the smallest delivery interval that they can promise is 14 days. How much of a discount should you ask for in the fixed order cost that the supplier charges you so that you would incur the cost of EOQ policy

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