P. Ltd., is engaged in the manufacture of industrial pumps of a standard description. The company uses about 75,000 valves per year for its production and the usage is fairly constant at 6,250 valves per month. The valves cost Rs. 1.50 per unit when brought in quantities and the carrying cost is estimated to be 20% of average inventory investment on the annual basis. The cost to place an order and process the delivery is Rs. 18. It takes 45 days to receive delivery from the date of an order and a safety stock of 3,200 valves is desired.

You are required to determine:

(i) The most economical order quantity; and
(ii) The reorder point.