Aberwald Corporation expects to order 126,000 memory chips for inventory during the coming year, and it will use this inventory at a constant rate. Fixed ordering costs are $200 per order; the purchase price per chip is $25; and the firm's inventory carrying cost is equal to 20 percent of the purchase price. (Assume a 360-day year.)

a. What is the economic ordering quantity for chips?

b. Aberwald holds a safety stock equal to a 30-day supply of chips, what is its average inventory level?

c. How many orders should Aberwald place during the year?

d.If the company is offered 1% discount for the orders of 5000 chips or more, should this offer be accepted? Make calculations for the decision.