In this problem, your company is a distributor of products. You serve as an inventory manager for the regional distribution center (DC) here in the Atlanta area. In this role, you schedule the purchase and shipment of products from various suppliers inbound to the Atlanta DC. Once you receive the products at the DC, they are stored in inventory until they are picked, packed, and shipped outbound to your company's downstream customers in response to orders. For each of your products, you currently use a single, dedicated supplier. Each of your suppliers ships their products to you from their facility using trucking services, and they provide you with choices of different LTL or truckload trucking carriers depending on your shipment size. Consider managing inventory now for product 101 produced by Supplier A. Currently, you face demand for product 101 of about 200 units per week. Each unit of product 101 has a purchase cost p of $500 and you decide to value your inventory at the slightly higher rate of $550 (v). As is typical, you are required to pay for products when you order. For inventory carrying cost (either in-transit or at your facility), you assume an annual carrying cost rate r = 18% per year; this rate includes your capital cost but also components that model product quality loss over time, risk of theft, and risk of obsolescence. You estimate that storing one item of product 101 in your DC requires an equivalent rent (storage cost) of s = $10 per unit per year. Question 2 (30 pts) Suppose now that you want to consider shipping by LTL transportation as an alternative. If you use LTL transport, you still incur a fixed order processing charge of k = $100. However, you estimate that the LTL carrier will charge you $75 + 2q for a shipment of size q, with no limit on the shipment size. Note that if you sent 700 items by this mode, the total transportation charge would be $1,475. The lead time for LTL shipping is somewhat longer since the transit time is 6 days, so TL = 16 days. 1. Compute the best LTL shipping quantity q* using the EOQ approach. * d 2. Again, your preference is to not place more than two orders per week. So, if 2 is not a multiple of 0.5 weeks, adjust your ordering/shipping headway to the nearest multiple of 0.5 weeks. How frequently do you order an LTL shipment quantity and how much is your order quantity qL? 3. Compute your total logistics costs per week for shipping by LTL transportation: • LTL transportation cost per week • Fixed ordering costs per week • Facility inventory cost (storage and carrying cost) per week • Pipeline inventory cost per week