3) Ceylon Steel produces QT bars using a quench and self-tempered process at its facilities in Hambantota. The firm works 48 weeks in a year. The firm has gathered the following information from its Athurugiriya office:

Demand = 5 tons per week

Production rate = 20 tons per week

Setup cost = $10,000 per production setup

Cost = $2,000 per ton

Holding cost = 25% per year

The firms supply chain manager wants to calculate for the QT bars:

a) Optimal size (EPQ) of the production run

b) Annual holding costs

c) Annual ordering costs

d) Total inventory costs