A company distributes repair parts for high-end appliances. The annual demand is 81,000 and the company operates 300 days per year. The annual carrying cost is 20% of the item cost, which is $500. The ordering cost is estimated at $60 and the shortage cost is $150.

a) Determine the optimal order quantity.

b) Determine the optimal shortage level.

c) How many order per year will they place?

d) What is the maximum inventory level?

e) Determine the annual shortage cost.

f) If the daily demand is 30 and the lead time in days is 3, what is the reorder point?

g) If the daily demand is 67 and the lead time in days is 2, what is the reorder point?

h) If the daily demand is 25 and the lead time in days is 4, what is the reorder point?

i) What do you infer based on the answers in (f) to (h)? (Answer in text)