Norris Harrell's Houston Computer Store sells a $ 200 printer. The demand for this is constant throughout the year, and annual demand is forecast at 600 units. The management cost is $ 20 per unit per year, while the cost per order is $ 60. Currently, the company ordered 12 times a year (50 units each). There are 250 days a year and lead time is 10 days.
a) Given the current policy of order 50 units at once, what is the total annual cost of ordering and the annual cost of operation?
b) If the company using the best inventory policy, what would the total cost of ordering and management?
c) What is the reorder point?