Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year.

PARAMETER	VALUE
Item cost	$10.00
Order cost	$215.00	/order
Annual holding cost	27	% of item cost
Annual demand	22,600	units
Average weekly demand	452	/week
Standard deviation of weekly demand	25	units
Lead time	3	week
Service probability	95	%

a. Determine the order quantity and reorder point. (Use Excels NORMSINV( ) function to find your z-value and then round that z-value to 2 decimal places. Do not round any other intermediate calculations. Round your final answers to the nearest whole number.)

Optimal order quantity Answer units

Reorder point Answer units

b. Determine the annual holding and order costs. (Do not round any intermediate calculations. Round your final answers to 2 decimal places.)

Holding cost($)Answer

Ordering cost($)Answer

c. Assume a price break of $50 per order was offered for purchase quantities of 2,000 units per order. If you took advantage of this price break, how much would you save annually? (Do not round any intermediate calculations (including number of setups per year). Round your final answer to 2 decimal places.)

Annual saving($)Answer