Part 1 (10 marks) With the outbreak of COVIDIQ, the world is experiencing a severe shortage of ventilators for treating patients in hospitals. 035 is a manufacturer of ventilators in Melbourne. It uses a special component to make its tophof-the range ventilators. 035 requires an average of 24,000 units of this special component every year in its manufacturing process. The major supplier of the special component that 035 has been dealing with, is a preferred supply chain partner who charges a price per unit of $3000 for the component. Each order costs $500 to process. Because of limited storage space, the operations manager wants to factor in inventory holding cost at 13.75% of the unit cost. You have been asked to: (1) Determine the economic order quantity (E00) and total annual cost if ordering the E00 number of units. How much will 035 be able to save by adopting the E00: versus a current Q = 400? What is the reorder point with safety stock if lead time is 21 days, standard deviation of weekly demand is 3.75 and on an average 035 operates for a total of 48 weeks every year? Assume a 2 value of 1.645 corresponding to the desired service level as specified in 085' operating procedures. What would the reorder point be without safety stock and how would you interpret each of the two reorder points? (3 marks) (2) Environmental considerations, material losses and waste disposal can be included in the E00, model to improve inventory management practices. Assume that on an average 7.5% of the components that 035 purchases are damaged in transit thus becoming unusable and have to be disposed of. Disposal cost is $250 per unit. Find the new E001 and total annual cost when the disposal cost is considered. What implications does this have for the sustainability of DBS' inventory practices? (3 marks} (3) Explain the implications to the operations manager ifestimates of setup (order) costs include fixed, semi~variable, and pure variable costs while inventory-holding costs includes only pure variable costs