5. [15%] A grocery store company specializing in rare and expensive foods is considering operating under a backorder policy for a particular kind of Bel- gian cheese. The company currently operates with no backorders. It costs the company $75 to place an order with the Belgian manufacturer, and pays $1500 per wheel of cheese, with a 20% annual holding cost per wheel. De- mand for the cheese is on average 1 wheel of cheese per week. The company operates the store 50 weeks per year. (a) What is the economic order quantity that minimizes yearly inventory cost (with no backorders)? (b) What is the total cost to operate this inventory policy? Page 3 of 8 (c) The company proposes allowing backorders. It will compensate cus- tomers by providing them a discount and promising home delivery. The company estimates the backorders will cost $680 per wheel of cheese. What is the new economic order quantity and planned backorder quan- tity under the new policy? (d) What is the total cost of the backorder policy? (e) In your opinion, which policy (backorder or no backorder) should be implemented