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Question: problem 3 you own a tesla dealership for the 2018...

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Problem 3. You own a Tesla dealership. For the 2018 Model 3, you estimate annual demand to be 3,500 units. Your fixed order cost for this model is S10,000, and each unit costs you $44,000. The holding cost is $1,000 per unit per month. i) What is the economic order quantity? 1) How often should you order? iii) suppose Tesla makes you an offer: If you order 150 units or more at a time, they will decrease the purchasing cost to $40,000 per unit for the entire order, but orders under 150 units must still pay the original cost. Does your order quantity change? If yes, what is the new quantity? iv) Does your monthly cost change with this deal? v) Suppose the quantity at which the order applies is not 150, but some other number. What is the largest such number that still makes the offer appealing?

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