Calculate the average number of orders per month and order quantity for each component. In addition, calculate the total holding and ordering costs.
An assembler orders two components from a single supplier. The assembler uses 200 units of the first component and 4000 units of the second component every month. The fixed transportation cost is $600. Also, the inspection and sorting costs are $100 for each component. The unit purchasing cost is $400 for the first component and $200 for the second component. The carrying cost is 20%. The assembler is trying to come up with an ordering plan that minimizes total holding and ordering costs. Find the best possible plan using the heuristic method. Calculate the average number of orders per month and order quantity for each component. In addition, calculate the total holding and ordering costs.
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