Bell assumed with certainty that the ordering cost is $543 per order and the inventory carrying cost is $210 per unit per year.
However, the inventory model parameters are frequently only estimates that are subject to some degree of uncertainty.
Consider three cases of variation in the model parameters as follows:
(a) both ordering cost an carrying cost are as originally estimated;
(b) both ordering cost and carrying cost are 20 percent less than originally estimated;
(c) both ordering cost and carrying cost are 20 percent higher than originally estimated;
(d) ordering cost is 20 percent higher and carrying cost is 20 percent lower than estimated. Discuss your finding.