- Problem 3: 20 points. Assume that carrying cost is $1/unit/week: order cost is $100/order: and demand is 1 unit/day, with 360 working days per year. Suppose that this company is currently running a policy of ordering Q = 45 units each time. 45 is NOT Q*. a) If they order 45 units each time, what is the Total Setup Cost, Total Holding Cost, and Annual Total Cost? Which is greater, Total Setup Cost or Total Holding Cost for the year? b) What is their average inventory with this policy of Q = 45? c) How many days is it between order placement and order receipt? (the order cycle time) d) Now calculate for Q*, and then TC using Q*: how much money do we save compared to a)