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4. Company Optimize needs to determine an inventory policy for the following set of items: Item Annual Demand Unit Cost Fixed Order (Setup) Cost 1
4. Company Optimize needs to determine an inventory policy for the following set of items: Item Annual Demand Unit Cost Fixed Order (Setup) Cost 1 6,000 4.0 300 2 2,000 10.0 250 3 3,000 3.0 150 4 4,000 3.0 400 5 2,500 0.5 100 6 10,000 2.0 300 Additionally, the holding cost rate is 20%. The company wants to limit the average investment in inventories (stock) to UL. Determine the best inventory policy under this investment limit and provide the corresponding average annual cost when (a) UL=$18,000, (b) UL=$14,000.
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