The landlord's favorite place to buy shrimp in new orleans was the cajun seafood market on claiborne and he did not hesitate to stock up on shrimp when he dropped by the shotgun double house he bought as an investment a few years ago. sadly, it was 685 miles one way to visit the property and even though gas was available at $1.88 per gallon and the car achieved 25 miles per gallon, it was an expensive trip. he packed a cooler with $12 worth of ice regardless of the quantity of shrimp he bought to bring home. the shrimp were a bargain at $7.99 per pound for jumbos and he always tried to fit 35 pounds of the crustaceans in the cooler.

M. cotteleer electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. one of the components has an annual demand of 235 units, and this is constant throughout the year. carrying cost is estimated to be $1.25 per unit per year, and the ordering (setup) cost is $21 per order. a) to minimize cost, how many units should be ordered each time an order is placed? b) how many orders per year are needed with the optimal policy? c) what is the average inventory if costs are minimized? d) suppose that the ordering cost is not $21, and cotteleer has been ordering 125 units each time an order is placed. for this order policy (of q = 125) to be optimal, determine what the ordering cost would have to be.