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Question - 4. Westside Auto purchases a component used in the manufacture of automobile generators directly from the
supplier. Westside’s generator production operation, which is operated at a constant rate, will require 1000
components per month throughout the year (12,000 units annually). Assume that the ordering costs are $25 per
order, the unit cost is $2.50 per com- ponent, and annual holding costs are 20% of the value of the inventory.
Westside has 250 working days per year and a lead time of 5 days. Answer the following inventory policy
questions: a.
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