A printing company estimates that it will require 5,500 reams of a certain type of paper in a year. Per unit price is 12 dollars. The annual cost of carrying one unit in inventory is 0.7 dollars. The company buys the paper from a wholesaler in the same town, sending its own truck to pick up the orders at a fixed cost of 16 dollars per trip. Assume 200 working days per year and the lead time for orders is 4 working days.

a) [2 points] The optimum number of reams to buy at one time is ___________ . (Round your solution to the nearest integer)

b) [2 points] _____________ times should lots of this size be bought during a year. (Round your solution to two decimal places if needed)

c) [3 points] The reorder point (ROP) is _____________ units. (Round your solution to the nearest integer)

Now assume that the company decided to produce the papers on its own at a rate of 70 reams of paper per day. They still need 5,500 reams of paper in a year. The setup cost for the production system is 40 dollars. Assume 200 working days per year. Per unit price is 12 dollars. The annual cost of carrying one unit in inventory is 0.7 dollars.

d) [2 points] The optimal production quantity is_____________ units. (Round your solution to the nearest integer)

e) [2 points] The maximum inventory level is _____________ units. (Round your solution to two decimal places if needed)

f) [2 points] The percentage of time in a year that the facility will be producing components is _____________ %. (Round your solution to two decimal places if needed)

g) [3 points] The annual cost of holding inventory is _____________ dollars. (Round your solution to two decimal places if needed)