5. The Twin Rivers Driving Range has a fairly uniform business all year. About 20 dozen golf balls are lost, stolen, or damaged beyond use each of the 52 weeks of operation.

The balls cost $5 a dozen to purchase. The cost to hold inventory is 1.5 percent per month, and the cost to place a purchase order is $7. The driving range needs a minimum of 200 dozen balls in inventory, and the replenishment lead time is 3 weeks.

a. How many balls should this organization buy each time it buys?

b. What is the reorder level for balls?

c. Discuss methods of determining when the reorder level is reached. It costs about

$12 to count the balls on hand—a job that must be done when the range is not in operation. What methods could be used to manage the inventory?