Given information: - Annual Demand =1000 units - \# days per year =365 - Ordering cost =$5/ order - Holding cost = \$1.25/unit/year - Lead time =5 days - Unit cost =$12.50 a) Find the Economic Order Quantity (EOQ or Q)=2DS/H (1 point) b) Find the reorder point (R)=dL(1 point ) c) Find the Total Annual Cost (TC) =DC+QDS+2QH (1 point) d) Explain how this inventory model works in a sentence or two using the values you calculated for a ) and b ) above. Be specific. ( 2 points) e) If we added safety stock to this model, what would happen to: a. The EOQ (go up, down, or stay the same)? Why? (2 points) b. The R go up, down, or stay the same)? Why? (2 points) c. The Total Annual Cost go up, down, or stay the same)? Why? (2 Points) 2) Fixed Time Period Model (4 points) Given Information: - Annual Demand = 1000 units - \# days per year =365 - Ordering cost =$5/ order - Holding cost = \$1.25/unit/year - Lead time =5 days - Unit cost =$12.50 a) Find the Economic Time Interval (T) IN DAYS =Q/D (1 point) b) Find the Optimal Replenishment Level (M)=d(T+L). (1 point) c) Explain how this inventory model works in a sentence or two using the values you calculated for a) and b) above. Be specific. (2 points) The BUS 460 class starts a new business in the student union. They plan to sell their new product which is guaranteed to give everyone an A on all their finals. The price they will sell it for is $100 and it costs them $70 per unit to make. If they cannot sell all the units before finals, they can resell them after the semester for only $20. a) Find the Cu (cost of underestimating). (1 point) b) Find the Cs (cost of overestimating). (1 point) c) P(Q) or probability of the optimal order quantity =Cu/(Cu+Cs). (1 point)