Do the following problem. Show your work. You can either use MS Excel.

A car rental agency uses 1000 boxes of staples a year. The boxes cost $6 each. It costs $9 to order staples, and it costs $0.50 to hold a box of staples in inventory for one year.

(a) At the present time the car rental company is ordering 200 boxes per order. What is the total inventory cost for this order quantity?

(b) How many boxes of staples should the car rental company order each time they need staples, to minimize their combined ordering and holding costs for staples (economic order quantity)?

(c) Suppose that the company is open 250 days per year with lead time (LT) of 2 days to get an order. What would the reorder point (ROP) be without consideration for safety stock or service level?

(d) If you wanted a safety stock (SS) of 10 boxes, what would be the reorder point?