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Question 2 : Ford and GM carry spare parts for their dealers at a third - party warehouse in Michigan's Upper Peninsula. Demand for Ford

Question 2: Ford and GM carry spare parts for their dealers at a third-party warehouse in Michigan's Upper Peninsula. Demand for Ford spare parts is 1500 units per year, whereas demand for GM parts is 1600 per year. Each spare part's price is $100 and both companies have annual holding costs of 10 percent of this price. Currently, each company uses a separate truck to ship these parts. Each truck has a fixed cost of $500.a) What is the optimal order size for Ford and for GM? What is the total cost (the annual ordering cost and the annual holding cost only) for each company?b) A third-party logistics provider has offered to combine shipments for each of the two companies on a single truck. This will increase the cost of each truck to $800. Should Ford and GM accept the third party's proposal (considering the total annual cost of ordering and holding only)?

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