Midwest Precision Control Corporation is trying to decide between two alternate Order Plans for its inventory of a certain item. Irrespective of the plan to be followed, demand for the item is expected to be 1,000 units annually. Under Plan 1st, Midwest would use a teletype for ordering; order costs would be Birr 40 per order. Inventory holding costs (carrying cost) would be Birr 100 per unit per annum. Under Plan 2nd order costs would be Birr 30 per order. And holding costs would 20% and unit Cost is Birr 480.

Requirements:

(1)Calculate total annual ordering cost

(2)Calculate total annual carrying cost

(3)Calculate total annual inventory cost

(4)Calculate the Economic Order Quantity

(5)Calculate the total annual cost inventory cost using EOQ inventory Policy

(6)Compute ordering point assuming the lead time is 3 days