Hana Home Furniture (HHF), has an annual demand of 1,000 units of cupboard. The cost of the cupboard is RM200. The carrying cost is estimated to be 10% of the unit cost per cupboard per year and the ordering cost is RM30 per order. The stock is received 3 working days after an order has been placed. HHF operates for 6 days in a week and 52 weeks a year.

a. To minimize cost, how many cupboards should HHF order at a time? [4 marks]

b. How many orders per year would be placed? [2 marks]

c. Based on the optimum order quantity, determine the reorder point. [3 marks]

d. What is the total annual inventory cost? [4 marks]

e. The cupboard supplier has offered to HHF, that if they order 200 or more cupboards, they can get a 8% discount on the cost of the cupboard. Should HHF take the discount? [7 marks]