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

Item cost	$	10.00		Standard deviation of weekly demand	25	per week
Order cost	$	250.00		Lead time	1	week
Annual holding cost (%)		33	% of item cost	Service probability	95	%
Annual demand		25,750
Average demand		515	per week

a.	State the order quantity and reorder point. (Use Excel's NORMSINV() function to find the correct critical value for the given -level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.)

Optimal order quantity	units
Reorder point	units

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

Holding cost	$
Ordering cost	$

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

Annual savings

$