net profit

Office HQ is a discount retailer of office goods. One of its most popular products is the Stick brand pen, packaged six to a box and retailing for $1.29. Each box costs Office HQ $0.95. Office HQ is open five days a week, 52 weeks a year. Daily demand for Stick pens is reasonably constant, averaging 65 boxes. The cost for Office HQ to place an order is $30, and the firm uses an annual inventory holding cost rate of 22%. Lead time for delivery is one week, and Office HQ desires a safety stock of 100 boxes of pens. If Office HQ must order in increments of 100 boxes, determine the following:
a. The optimal inventory policy (order quantity and reorder point) for Stick pens.
b. The number of calendar days between orders (cycle time).
c. The total annual inventory cost (holding, ordering, safety stock, and procurement) and the projected annual net profit of this policy.