Your company sells a product for which the annual demand is 10,000 units. Holding costs are $1.00 per unit per year, and setup costs are $200.00 per order.

a. What is the economic order quantity for your product? (Correct answer is 2,000 units, please show how you calculated the correct answer).

b. What is the total annual EOQ cost? ( Correct answer is $ 2000, please show how this was calculated?)

c. Now suppose that instead of purchasing the product, you decide to produce it yourself. Assume the same demand and cost structure as above. In addition, your average production rate would be 200 units per day, and you have 200 working days per year. What batch size should you use? (Correct answer is 2309 units, Please show how this was reached?)

d. What is the annual cost of setup and holding from part c? (Correct answer is $ 1732) show how this answer was reached)

e. What conclusions can you make regarding the impact of production rate on the holding and setup costs?

( Correct answer is the lower production rate, the lower the effective holding cost, which implies largeer optimal batch sizes and lwoer total costs) Explain in more detail?

2. Consider a newsvendor problem where demand is expected to be normally distributed with a mean of 1,000 units and a standard deviation of 800 units. This is a high-margin monopoly item, with a variable production cost of $2 per unit and a sales price of $100 per unit. In addition, the producer must pay $1 to discard any unsold units. How many units should be produced?