Question: Suppose you purchase computers for all Federal Reserve locations. The demand for a particular model is 4,250 per year, and is steady throughout. Each time you receive a shipment, the delivery cost plus other administrative costs total $60. To hold a computer in inventory for one year costs $125. The computers originate in Japan, and the lead time necessary is 10 days (assume 250 days to the year).

(a.) Write down the values of the relevant parameters in order to set this problem up for solution with the POM-QM software.

(b.) Find the economic order quantity for this product.

(c.) How many days elapse in between orders?

(d.) Suppose you found a supplier that provides free delivery. With this supplier, your ordering cost drops to $15 per order. However, they charge you $2.00 more for each machine. Is it more economical to stay with your original supplier or to switch to the new supplier? (Show work.)