Consider a retailer that sells an item with a relatively stable demand rate of $960$ units per year. The annual inventory carrying rate for the retailer is $25$ percent. Suppose that the retailer operates $50$ weeks per year.

Currently, the retailer purchases this item from a local supplier at a unit cost of $$100$ and a constant delivery lead time of $4$ weeks. The retailer incurs an order cost of $$500$ per order.