SY Manufacturers (SYM) is producing T-shirts in three colors: red, blue, and white. The monthly demand for each color is 3,883 units. Each shirt requires 0.75 pound of raw cotton that is imported from Luft-Geshfet-Textile (LGT) Company in Brazil. The purchasing price per pound is $3.60 (paid only when the cotton arrives at SYM's facilities) and transportation cost by sea is $0.40 per pound. The traveling time from LGTs facility in Brazil to the SYM facility in the United States is two weeks. The cost of placing a cotton order, by SYM, is $123 and the annual interest rate that SYM is facing is 19 percent.

What is the optimal order quantity of cotton?

How frequently should the company order cotton?

Assuming that the first order is needed on 31-October, when should SYM place the order?

17-October

31-October

14-November

How many orders will SYM place during the next year?

What is the resulting annual holding cost?

What is the resulting annual ordering cost?

If the annual interest cost is only 5 percent, how will it affect the annual number of orders, the optimal batch size, and the average inventory? If the holding cost is lower the batch size is (LARGER OR SMALLER) thus, the average inventory is (LARGER OR SMALLER). The number of orders would be (LARGER OR SMALLER).