We are in December Y06 and we want to establish the purchasing conditions for manuals and metallic supports. Manuals As specified in the BOMs of our company, we are purchasing 3 different manuals whose forecasted inventory situation by the end of this year shows the following situation: Manuals of tables: 2,794 u. Manuals of chairs: 23,215 u. Manuals of shelves: 8,323 u. Our Accounting Dept. has established the holding cost for the manuals at 15% of the purchasing cost. On the other hand, we are going to establish a safety stock for these supplies, either of 10 days of sales or according to a service level of 97%. Our supplier of these materials is offering the following conditions: Lot size: box of 2,500 manuals Price per box: 37.5 Order cost: 3.4 /order Lead time: 2.5 weeks Price schema: Boxes from 0 15 20 25 30 35 Boxes to 14 19 24 29 34 max Discount 0.00% 1.00% 1.50% 2.00% 2.50% 3.00% Metallic support for shelves As specified in the BOMs of our company, we are purchasing metallic supports for our shelves whose forecasted inventory situation by the end of this year shows the following situation: Metallic support: 435,912 u. Our Accounting Dept. has established the holding cost for the metallic support at 25% of the purchasing cost. On the other hand, we are going to establish a safety stock for these supplies, either of 14 days of sales or according to a service level of 99%. Our supplier of these materials is offering the following conditions: Lot size: full pallet o Boxes per pallet: 80 o Units per box: 6 Price per pallet: 412 Order cost: 250 / order Lead time: 5 weeks Price schema: Pallets from 0 165 170 175 180 185 Pallets to 164 169 174 179 184 max Discount 0.00% 1.00% 1.50% 2.00% 2.50% 3.00% Questions: You are required to design the inventory and purchase policy of the above-mentioned materials. Concretely, the board expects from you: Safety stock policy: full information about your choices and recommendations. Purchase policy. For each material o Quantity to order O ROP O Estimated frequency of the orders (weeks) o Total annual cost, specifying: Cost of purchasing, Holding cost Ordering costs for the year 07