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ECO Auto Repair fixes about 1 , 3 0 0 of a certain transmission part annually. ECO purchases each part for $ 5 5 .

ECO Auto Repair fixes about 1,300 of a certain transmission part annually. ECO
purchases each part for $55. They use 22% annual interest rate for holding costs. The ordering cost (or
setup cost) for each order is estimated as $33 based on labor and shipping costs. Supplier lead time is 6
weeks. Currently the company places an order to buy this transmission part once every 4 months, but they
are not sure if this is optimal and would like you as a systems engineer to make a recommendation?

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