In Exercise 5, imagine that you have chosen Reliable as your supplier. Value Electric very much wants your business and offers you the choice of three mutually exclusive alternatives: a reduced lead time of 1 week, a reduced minimum batch of 800, or a reduction in standard deviation of lead time by 1 week.

a. What are the expected annual costs of undertaking each of these options?

b. What is the expected annual cost if all three could be put into effect?

c. Would you change your decision to go with Reliable for any of these options?