(Appendix) Bobbie Brown manages a printing company in Seattle, Washington. She has been wondering how many reams of letter-size paper to order at a time and when to reorder paper. She says that she wants a safety stock of 500 reams and that she uses 93,750 reams annually. Further analysis reveals that the cost of placing an order is about $12, the cost of carrying one ream of paper in stock is estimated at $1 annually, and order lead time is 5 days. The printing company operates 300 days each year.

a. Calculate the economic order quantity.

b. Calculate the order point.