Reference no: EM132629851

An automobile manufacturer uses about 60,000 pairs of bumpers (front bumper and rear bumper) per year, which it orders from a supplier. The bumpers are used at a reasonably steady rate during the 240 working days per year. It costs $3.00 to keep one pair of bumpers in inventory for one month, and it costs $25.00 to place an order. A pair of bumpers costs $150.00.

• Write the equation for the annual carrying cost function for this scenario.
• Which inventory model should be used here and why? The instantaneous model, the non-instantaneous model, or the single-period model
• Write the equation for the annual ordering cost function for this scenario