Parker Hi-Fi Systems, located in Wellesley, Massachusetts, a suburb of Boston, assembles and sells the best of home theater systems. Systems are assembled with components from the best manufacturers around the world. Although most components are procured from wholesalers on the East Coast, some essential items, such as LCD screens, come directly from the manufacturer. For example, LCD screens are shipped over the air from Foxy, Ltd., Taiwan, to Boston's Logan airport, and the best speakers are purchased from the world-famous US manufacturer, Boss. Parker's buying agent, Raktim Pal, submits a release order for LCD screens every 4 weeks. The company's annual requirement is 500 units (2 per business day), and the Parker unit cost is $ 1,500. (Due to Parker's relatively low volume and quality focus - not volume focus - of Parker's many suppliers, Parker is rarely able to get quantity discounts.) Because Foxy promises delivery within 1 week of receiving the order release, Parker has never had a shortage of LCDs. (The total time of release date and date of acceptance is 1 week or 5 business days.) Parker activity-based costing system has generated the following inventory costs. Procurement costs, $ 500 procurement costs per order, including actual labor costs involved in ordering, customs checks, airport pick-up arrangements, factory delivery, keeping inventory records, and helping the bank issue checks. Parker's storage costs take into account storage, damage, insurance, taxes, etc. on a square foot basis. It costs the same as $ 150 per LCD per year. With additional control over supply in the supply chain, president Parker has sought permission to seriously purchase LCDs. One area to look at for possible costs is inventory procurement. 

1. What is the optimal LCD Discussion order number to place on each order?

2. What is the optimal reorder point (ROP) for LCD?

3. What cost savings would Parker realize if he implemented an order plan based on EOQ?