Wing Computer Corporation (WCC) uses 10000 keyboards each year in the production of computer terminals. The company operates 50 weeks in a year. Ordering cost for the keyboards is RM30 and the holding cost of one keyboard is 20% per year of the value of the keyboard. This keyboard can be purchased from a supplier at the price of RM75 each. Lead time is 2 weeks.

a)At present WCC orders 1250 keyboards. What will be the total annual inventory cost?

b)What will be the annual savings over the present policy if WCC were to use the EOQ policy?