Customers at Joes Office Supply Store demand an average of 6000 desks/year. Each time an order is placed, an ordering cost of $300 is incurred. The annual holding cost for a single desk is 25% of the $200 cost of a desk. One week elapses between the placement of an order and the arrival of the order. No shortages are permitted.

If shortages were allowed and a cost of $80 is incurred if Joes is short one desk for one year, should Joe allow shortages? Show calculations.