Ross Whites machine shop uses 2,500 brackets during the course of a year, and this usage is relatively constant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per bracket per year is $1.50 (or 10% of the unit cost) and the ordering cost per order is $18.75. There are 250 working days per year. Now, Ross White wants to reconsider his decision of buying the brackets and is considering making the brackets in-house. He has determined that setup costs would be $25 in machinist time and lost production time, and 50 brackets could be produced in a day once the machine has been set up. Ross estimates that the cost (including labor time and materials) of producing one bracket would be $14.80. The holding cost would be 10% of this cost. 1. What is the daily demand rate for the shop? 2. What is the shop's optimal production quantity? 3. Given the optimal production quantity calculated above, how many days will it take to produce optimal production quantity? 4. During the time producing the optimal quantity, (based on your calculation in Questions 2 and 3), how many brackets will be sold? 5. Rose uses the optimal production quantity calculated above in Question 2, The maximum inventory level would be ____ , the average inventory level would be ____ , and the annual holding cost would be ____. 6. If Rose uses the optimal production quantity calculated above in Question 2, there would be about ____ production runs each year. Hence, the total annual setup cost is ____ and the total annual inventory cost, including the cost of production is ____. 7. If the lead time is one-half day, the reorder point (ROP) is ____ units.