Determining order quantities and inventory levels can be very difficult for any business. Vicious Cycle is currently using the Fixed-Quantity Model versus the Fixed-Period Model. Every year, Vicious Cycle reevaluates the model used and calculates the data using the Fixed-Period Model to determine if the Fixed-Quantity Model is still the best fit for the company. As Chief Supply Officer, you provide this information to the Board of Directors at the annual meeting. You are drafting an email to the Board to explain what your current Fixed-Quantity Model is, along with the order quantity (Q) and reorder point (P). You also explain the Fixed-Period Model, along with the optimal order period (O) and the optimal order quantity (EOQ).

Consider the following data when calculating P and Q for each model.

R = annual demand = 1,000 units

C = delivered purchase cost = $5.00/unit

K= annual carrying cost percentage = 30 percent

S = order cost = $75.00/order

L = Lead Time = 20 working days

*Assume 250 working days per year.

Draft an email (Microsoft Word Document) to the Board of directors, explaining both the Fixed-Quantity Model and the Fixed-Period Model. Provide the Order Quantity (Q) and Reorder Point (P) for the Fixed-Quantity Model and the optimal order period (O) and the optimal order quantity (EOQ) for the Fixed-Period Model.