On average, PT. ABC would order from PT. EFG 1.000.000 kg Crude Palm Oil (CPO) every month to be used as the raw materials for its production. This amount of CPO is refined and processed to produce cooking oils. The inventory is depleted each month and needs to be reordered. If the carrying cost is $32.000 and the fixed order cost is $ 4.000.000 (Assume a 360-day year)

1. Assess whether PT. ABC already follows an economically advisable strategy? Complete your calculation with supporting detail argument .
2. If it is further noted that PT.ABC procurement team takes 10 days to place and receive an order and the firms production policy requires it to hold 50.000 kg as safety stock to prevent against stockouts. Determine the reorder point that must be set.