A fast food outlet orders vegetables at the beginning of a week to meet its demand for that week, which is 300 kg. The ordering cost per order is $25. It costs the outlet $.05 per kg per day to keep the vegetables refrigerated.

a. Determine the inventory cost of the current ordering policy

b. Determine the optimal inventory policy, assuming instantaneous lead time.

c. Compute the cost savings (if any) per annum (52 weeks) if the optimal ordering policy of part b is implemented LO.1