2. Gradys Metal Works needs to determine the optimal order quantity for a given part. The part is sold at a rate of 1200 per month. Each order costs $1500 and the holding cost for each part is $50 per year.The lead time for order arrival is 0.5 months.

a. What is the optimal order quantity?

b. How many orders per year will be made?

c. What is the duration of each cycle in days (assuming 365 days per year)?

d. What is the reorder point?

e. Graphically show a-d.

f. Assume the vendor has just notified you that they are moving production of the part off-shore and the lead time will now 1 month.What in your analysis changes (show all work).

g. What is the inventory position when an order is placed considering the conditions of part f.