Julia Walters owns and operates one of the largest Mercedes-Benz auto dealerships in Washington, DC. In the past 36 months her sales of this

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Julia Walters owns and operates one of the largest Mercedes-Benz auto dealerships in Washington, DC. In the past 36 months her sales of this luxury car have ranged from a low of 6 new cars to a high of 12 new cars, as reflected in the following table: Sales of new cars per month Frequency 6 3 7 4 8 6 9. 12 10 9. 11 12 Total 36 Walters believes that sales will continue during the next 24 months at about the same historical rates and that delivery times will also continue to follow this pace (stated in probability form): DELIVERY TIME (MONTHS) PROBABILITY 1 0.44 2 0.33 3 0.16 4 0.07 a. Walters's current policy is to order 14 cars at a time (two full truckloads, with 7 autos on each truck) and to place a new order whenever the stock on hand reaches 12 autos. What are the results of this policy when simulated over the next two years? b. If Julia Walters establishes the following relevant costs: (1) the carrying cost per Mercedes per month is $600, (2) the cost of a lost sale averages $4,350, and (3) the cost of placing an order is $570. What is the total inventory cost of the policy simulated (Q = 14, ROP = 12)? c. Suppose the cost for Julia Walters has changed, and now the carrying cost is $500 per month and the cost of ordering has been reduced to $200 with the cost of lost sales remaining at $4,350. What is the total inventory cost of the policy simulated (Q = 14, ROP = 12)?