Sec uses a large quantity of salt in its production process. Annual consumption is 60 000 tons over a 50-week working year. It costs 100 to initiate and process an order and delivery follows two weeks later. Storage costs for the salt are estimated at 0.10 per ton per year. The current practice is to order twice a year when the stock falls to 10 000 tons (all orders are equal in size).

Recommend an appropriate ordering policy for Sec and contrast its cost with the cost of the current policy.