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Question 4 (20 points) Pikachu Ltd. builds different types of houses and apartments. The company purchases bricks in 50kg pallets, Pikachu Ltd, uses 8,000 pallets

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Question 4 (20 points) Pikachu Ltd. builds different types of houses and apartments. The company purchases bricks in 50kg pallets, Pikachu Ltd, uses 8,000 pallets every year. Consider that the cost of placing and receiving an order for brick pallets is 65 and that the annual carrying costs of brick pallets in inventory is 2 per pallet and year. Required: a) Calculate the optimal quantity of inventory to order under the above set of assumptions. Explain your result. (6 points) b) Explain in detail the importance of calculating optimal quantity of inventory for Pikachu Ltd. Why can inventory be considered as "evil"? Explain your answer in detail. (8 points) c) Assume that the weekly usage of pallets is constant over the year and amounts to 167 pallets per week. If the lead time for bricks is 2 weeks, which is the Reorder Point? Explain your result (6 points)

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