Westside Auto purchases a component used in the manufacture of automobile generators directly from the supplier. Westside’s generator production operation, which is operated at a constant rate, will require 1000 components per month throughout the year (12,000 units annually). Assume that the ordering costs are $25 per order, the unit cost is $2.50 per component, and that annual holding costs are 20% of the value of the value of the inventory. There are 250 working days per year and the lead time is 5 days. Answer the following inventory policy questions.