Tim Madsen is the purchasing agent for Computer Center, a large discount computer

store. He has recently added the hottest new computer, the Power model, to the

store$$s stock of goods. Sales of this model now are running at about $13$ per week.

Tim purchases these computers directly from the manufacturer at a unit cost of

$$3,000,$ where each shipment takes half a week to arrive.

Tim routinely uses the basic EOQ model to determine the store's inventory policy for

each of its more important products. For this purpose, he estimates that the annual

cost of holding items in inventory is $20$ percent of their purchase cost. He also

estimates that the administrative cost associated with placing each order is $$75.$

Show all your calculations and the units of measurement.

a$.$ Determine the Inventory Policy.

b$.$ What is the total inventory cost?

$37$