4. Bliss Company sells optical equipment. Blitz Company manufactures special glass lenses. Bliss orders 11,400 lenses per year, 200 per week, at $35 per lens. Blitz covers all shipping costs. Bliss earns 25% on its cash investments. The purchase-order lead time is 2.5 weeks. Bliss sells 225 lenses per week. The following data are available (13 marks):

Relevant ordering costs per purchase order $41.25

Relevant insurance, materials handling, breakage,

and so on, per year $ 4.50

Required:

1. What is the economic order quantity (EOQ) for Bliss? (5 marks)
2. What is the reorder point? (5 marks)
3. Briefly discuss the fundamental difference between JIT and EOQ in determining inventory level. (3 marks)