A firm uses the policy of ordering two particular items at a time because they come from the same supplier. The characteristics of these items are shown in the following table:

a. Find the optimal cycle length for the joint orders. What are the optimal order quantities for the two items? What is the average annual cost for the two items combined?
b. Suppose the two items are managed independently, and each uses its own optimal order quantity. What is the average annual cost for the two items combined?
c. Suppose that there is a savings in the fixed cost due to joint ordering. Instead of $6, the ordering cost is only $3 because some activities cover both items. Which strategy (joint or independent) is preferable?