A company dealing in one item has a total demand of 250,000 sets/year. The company can buy from two sources with the following conditions:

Source A: Total production and supply capacity is 600,000 sets/year, supply in batches with regular intensity, cost per order is 150$. The price for each set is $120. The time to sign the purchase contract until the goods are available for sale at the company is 25 days.

Source B: The total capacity is large enough and the supply time is considered negligible. The price per unit is $158/set. The cost per order is $180. Order lead time is 35 days.

The cost of managing the reserve based on the amount of inventory in kind is $2.50/unit.

Request:

- What kind of reserves does this trading company belong to?

- Please choose the place of purchase with the smallest total cost and calculate the corresponding criteria?

b) The inventory requirement of an enterprise is 9,000 tons/year, the inventory cost coefficient is 5%, and the consumption intensity is steady. Enterprises may purchase goods at two establishments with the following conditions:

+/ Basis 1: The cost of ordering is $110 and only selling the satisfying batch of 1000 < q < 1500 tons at a price of $60/ton.

+/ Basis 2: Cost to order $140 and sell any batch for $55/ton.

Request:

- In which basis does the business buy goods, the amount of capital needed for a cycle of reserves is more optimal?

- What is the most profitable business to buy goods at and plot the optimal level of inventory and consumption?

- Assuming the business buys 1,200 tons each time, which facility should be more profitable?