1. (40 points ) A large retailer of stereo equipment orders one of its disk players from a Japanese company. The retailer has an annual demand of

a large retailer of stereo equipment orders of its disk players

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1. (40 points )A large retailer of stereo equipment orders one of its disk players from a Japanesecompany. The retailer has an annual demand of 81,000 units. Each time an order isplaced, it costs the finn $10. The holding cost is estimated to be $2 per year per unit.Once an order is placed, the finn usually receives the disk players in 3 days. Each playercosts $30. Assume one year has 360 days.a. (10 pts. )What is the optimal order policy for the disk players? What is the associated cost of thispolicy? Show a diagram for this policy.b. (10 pts. )If the retailer is currently ordering 500 disk players each time an order is placed, what isthe cost of this policy? Show a diagram.