Humber Inc. buys items for $45.25 each. It costs $210.75 to place an order with the supplier. Annual demand is 24396 units, and the annual holding costs are charged at 18%. (a) Find the economic order quantity and the optimal time between orders. The annual number of items demanded DD is: The fixed cost per order C0C0 is: Enter II in decimal form (i.e. 0.03 instead of 3.00%) The annual holding cost rate II is: The unit cost of the inventory item CC is: Round your answer for ChCh to 2 decimals. The cost of holding one item in inventory for one year ChCh is: Round your answer for QQ to the nearest whole number. The economic order quantity is QQ is Round your answer for TT to the nearest whole number. The optimal time (in days) between orders is TT is (b) Find the total annual relevant cost. Round your answer for TC(Q)TC(Q) to 2 decimal places. The total annual relevant cost TC(Q)TC(Q) is (c) Suppose Humber decided to operate with backorders (planned shortages). Say, the backordering costs are estimated to be $7.00 per unit per year. Find the economic order quantity and the maximum number of backorders. The cost of backordering one item for one year CbCb is: Round your answer for QQ to the nearest whole number. The economic order quantity is QQ is Round your answer for SS to the nearest whole number. The maximum number of backorders SS is (d) Find the total annual relevant cost with backorders (planned shortages). How do you think, should the company use the backorder inventory policy or not? Why? Round your answer for TC(Q,S)TC(Q,S) to 2 decimal places. The total annual cost TC(Q,S)TC(Q,S) for the inventory model with backorders is Your final conclusion is

• The company technically can not use the backorder policy as the total annual relevant cost increases if such policy is introduced.
• The company technically can use the backorder policy as the total annual relevant cost increases if such policy is introduced.
• The company technically can use the backorder policy as the total annual relevant cost drops if such policy is introduced.
• The company technically can not use the backorder policy as the total annual relevant cost drops if such policy is introduced.
• None of the above.