4. Suppose that the Black Hills Company described in problem 3 uses an order quantity of 350 units and maintains a minimum inventory, or safety stock, of 65 units.

a. Determine the average inventory level.

b. Determine the total annual ordering and holding costs for the item if the order quantity is 350 and the minimum inventory is 65 units.

c. Look at your figures in problem 3. How much of the difference in total cost is caused by the change from the EOQ in problem 3 to the order quantity of 350?