Austin (1977) conducted an extensive inventory analysis for the United States Air Force. He found that for over 250,000 items the annual holding cost was assumed to equal 32% of the item’s purchase price. He also found that when an order was placed for most items, a fixed cost of over $200 was incurred. The Air Force held one month of safety stock for each item. Given this limited information, discuss how the Air Force could improve its inventory policies.