Given the information on the table, formulate

an inventory management system. The item is

demanded $50$ weeks a year.

a$.$ State the order quantity and reorder point.

b$.$ Determine the annual holding and order costs.

c$.$ If a price break of $$50$ per order was offered for purchase quantities of over $2,000,$

would you take advantage of it$?$ How much would you save annually?

PARAMETER VALUE

Item cost $$10\mathrm{.}00$

Order cost $$250\mathrm{.}00/$order

Annual holding cost $33\%$ of item cost

Annual demand $25,750$ units

Average weekly demand $515/$week

Standard deviation of weekly demand $25$ units

Lead time $1$ week

Service probability $95\%$

Objective Question $16$ on p$.390($Ch$.11)$

$$ OQ$16.$ Lieutenant Commander Data is planning to make his monthly $($every $30$ days$)$ trek to

Gamma Hydra City to pick up a supply of isolinear chips. The trip will take Data about two

days. Before he leaves, he calls in the order to the GHC Supply Store. He uses chips at an

average rate of $5$ per day $($seven days per week$)$ with a standard deviation of demand of $1$

per day. He needs a $98$ percent service probability. If he currently has $35$ chips in inventory,

how many should he order? What is the most he will ever have to order?