Answered

Get the answers you need at Westonci.ca, where our expert community is dedicated to providing you with accurate information. Connect with a community of experts ready to provide precise solutions to your questions on our user-friendly Q&A platform. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

13.2. AV City (Problem 13.1) assumed with certainty that the order- ing cost is $625/order and the inventory carrying cost is $130/unit/ year. However, the inventory model parameters are frequently only estimates that are subject to some degree of uncertainty. Consider four cases of variation in the model parameters as follows: (a) Both ordering cost and carrying cost are 10% less than originally estimated (b) both ordering cost and carrying cost are 10% higher than originally estimated; (c) ordering cost is 10% higher and carrying cost is 10% lower than originally estimated; and (d) ordering cost is 10% lower and carrying cost is 10% higher than originally estimated. Determine the opti mal order quantity and total inventory cost for each of the four cases. Prepare a table with values from all four cases and compare the sensitivity of the model solution to changes in parameter values