Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. Item cost$10.00 Order cost $250.

$250.00

Annual holding cost (%)33% of item cost

Annual demand25,750

Average demand515 per week

Standard deviation of weekly demand 25 per week

Lead time 1 week

Service probability 95%

a. State the order quantity and reorder point.

b. Determine the annual holding and order costs.