Ross Whites machine shop uses 2,500 brackets during the course of a year, and this usage is relatively constant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per bracket per year is $1.50 (or 10% of the unit cost) and the ordering cost per order is $18.75. There are 250 working days per year.

Now, Ross White wants to reconsider his decision of buying the brackets and is considering making the brackets in-house. He has determined that setup costs would be $25 in machinist time and lost production time, and 50 brackets could be produced in a day once the machine has been set up. Ross estimates that the cost (including labor time and materials) of producing one bracket would be $14.80. The holding cost would be 10% of this cost.

1. The daily demand rate for Rose White's machine shop is ________

2. The optimal production quantity for Rose White's machine shop is _________

3. Given the optimal production quantity calculated above, it will take ____________ days for Rose White's machine shop to produce the optimal production quantity.

4. During the time producing the optimal quantity, there will be about _________ brackets sold.

5. If Rose uses the optimal production quantity calculated above in above, the maximum inventory level would be _______ , the average inventory level would be _________, and the annual holding cost would be ________

6. If Rose uses the optimal production quantity calculated above in above, there would be about ______ production runs each year. Hence, the total annual setup cost is ________ , and the total annual inventory cost, including the cost of production is_________

7. f the lead time is one-half day, the reorder point (ROP) is ________ units.