Solved: Inventory Model. Electronic Village stocks and sells a particular brand of personal computer

Inventory Model. Electronic Village stocks and sells a particular brand of personal computer. It costs the store $450 each time it places an order with the manufacturer for the personal computers. The annual cost of carrying the PCs in inventory is $170. The store manager estimates the annual demand for the PCs will be 1, 200 units. a. Determine the optimal order quantity and the total minimum inventory cost. b. Assume that shortages are allowed and that the shortage cost is $600 per unit per year. Compute the optimal order quantity and the total minimum inventory cost. c. Assume that the shipping cost per unit is $20/unit, determine the optimal order quantity and the total minimum inventory cost.