Polygram Sound Systems manufactures and sell sound systems for both home and auto. All parts of the sound systems, with the exception of CD players, are produced in the Rochester, New York, plant. CD players used in the assembly of Concord, New Hampshire. Polygram purchasing agent Mary Kim submit a purchase requisition for CD players once every 4 weeks. The companys annual requirement is 24000 units, and the cost per unit is $40.00. Polygram does not purchase in greater quantities because Morris Electronics does not offer discounts and promises delivery within 1 week upon receiving the purchase requisition, and rarely is there a shortage of CD players. (Total time between the date of order and date of receipt is 8 days). Associated with the purchase of each shipment, there are procurement costs that amount to $20 per order, (these include the costs of preparing the requisition, inspecting and storing the delivered goods, updating inventory records, issuing a voucher and a check for payment). In addition to procurement costs, Polygram incurs inventory carrying costs that equal $5.00 per unit per year. Beginning 2010, Polygram Sound System HR management has changed the annual operations days to 275 days per year. Polygram management will be embarking on the companywide cost control program in an attempt to improve its profits. One specific area to be closely scrutinized for possible cost savings is inventory procurement and economic order quantity (EOQ). To assist this program, compute the economic order quantity EOQ, annual holding cost, annual ordering cost, total annual cost and re-order point to provide Polygram a clear understanding.