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Submission; so plan to submit five to ten minutes early. Type or write your solution on a paper. Submit your typed or photo file via CANVAS Standard Normal distribution table is shown at the end of this problem set. 1. Explain these (20 points). A complete and clear discussion is important. (1) (10 points) Discuss the difference between On-hand-inventory (OHI) and net inventory (1) of inventory theory. (2) (10 points) When we have (r, q) policy, why do we still need (s,S) policy? What are the differences? 2. (25 points) ABC Co. produces a special type of a gear. The demand is 2500 units per year. Its in-house production rate is 4000 units per year. Setting up each production costs $1000 each time. The holding cost of a gear is $300 per year. (1) (20 points) Determine the optimal lot size of the production of the gear. (2) (5 points) Determine how many production runs need to be made per year