Question $1(5$ points$)$

Question $1$:

The PDS Coop sells sweatshirts with Purdue logo on them. It purchases sweatshirts from a supplier at $960$ each. During a typical month. $200$ sweatshirts are sold. $(1$

year $=12$ months$)$

$$It costs $$90$ to place an order

$$It costs $50\%$ of the unit cost to carry sweatshirts in inventory for a year.

a$.$ What is the optimal order quantity? Round up the order quantity to the nearest integer. $[$Hint: Remember to match the time scale in your calculation!$](1$ point$)|$

Formula: BOQ $=$

b$.$ If you order $300,$ what is the annual ordering cost $($s$)$ and annual holding cost

$()?(2$ points$)$

c$.$ If the lead time is $2$ weeks, what is the optimal order quantity and what is the reorder point $($L$\text{'}$D$)?(1$ month$=4$ weeks$)(2$ points$)$