Satou Saitou is the purchasing agent for West Valve Company. West Valve sells industrial
valves and fluid control devices. One of the most popular valves is the Western, which has an
annual demand of 4,000 units. The cost of each valve is $90, and the inventory carrying cost
is estimated to be 10% of the cost of each valve. Satou has made a study of the costs involved
in placing an order for any of the valves that West Valve stocks, and she has concluded that
the average ordering cost is $25 per order. Furthermore, it takes about two weeks for an order
to arrive form the supplier, and during this time the demand per weeks for West valves is
approximately 80.