I- For a manufacturing company that you are consulting for, managers are unsure about making inventory decisions associated with a key engine component. The annual demand is estimated to be 14,000 units and is assumed to be constant throughout the year. Each unit costs $60. The companys accounting department estimates that its opportunity cost for holding this item in stock for one year is 16% of the unit value. Each order placed with the supplier costs $210. The companys policy to order whenever the inventory level reaches a predetermined reorder point that provides sufficient stock to meet demand until the suppliers order can be shipped and received; and then to order twice as many units.

II- (THIS NEEDS TO BE DONE IN R) Assume that all problem parameters have the same values as those in part I, but that the annual demand has a triangular probability distribution between 13000 and 16000 units with a peak of 14000 units.

1. Perform a simulation consisting of 30 occurrences, and calculate the minimum total cost for each occurrence. Use R perform a simulation consisting of 1000 occurrences, and calculate the minimum total cost for each occurrence.
2. Determine the probability distribution that best fits the minimum total cost.
3. Determine the probability distribution that best fits the order quantity.
4. Determine a probability distribution that best fits the annual number of orders.
5. In the word document, explain your results and analysis to the vice president of operations.