Question
Bell assumed with certainty that the ordering cost is $543 per order and the inventory carrying cost is $210 per unit per year. However the
Bell assumed with certainty that the ordering cost is $543 per order and the inventory carrying cost is $210 per unit per year. However the inventory model parameters are frequently only estimates that are subject to some degree of uncertainty. Consider three cases of variation in the model parameters as follows: (a) both ordering costs and carrying costs are as originally estimated; (b) both ordering costs and carrying cost are 20% less than originally estimated; (c) bother ordering cost and carrying cost are 20% higher than originally estimated; (d) ordering cost is 20% higher and carrying cost is 20% lower than originally estimated.
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