A company estimates it will sell 5000 products in a year. Itwould like to make some number N of qually spaces orders of size xunits per order so that the total inventory cost (which includesordering and storage) is minimized.
a. If there is a $20 per order fixed cost plus a cost of $9 perunit ordered, and the storage cost per unit per year is $10, findthe number of orders and the number of units per order that thegoal of minimizing inverntory costs is achived.
b. Suppose that the ordering cost doubles to $18 per unitordered, and that no other change is made. Decide whether thisshould or should not change the solution that you found in part a., and justify your answer.
