5. Paul's Sales ludia, a large retailer situated in the Western India, has been losing sales because of non-availability of stock many times. The company's average inventory is 200 lakh. Its contribution ratio is 30 per cent. The inventory carrying cost is 3.5 per cent per annum. In a study carried out by the financial manager of the company, it was found that the company. will lose sales if it carried an inventory less than *450 lakh per annum. The range of inventories carried and expected lost sales are given below: Expected inventory level (lakh) Expected lost sales 200 250 300 350 400 450 4. AB Co. is considering a selective control for its inventories using the following data: (* lakh) 250 180 120 50 20 0 The company's working capital (excluding inventory) to sales ratio is 18 per cent. Assuming a tax rate of 35 per cent and an after-tax opportunity cost of 12 per cent, show which inventory policy the company should adopt.