(5011s) Sarah I) sells 10,400 CDs every year. I)igiSound wholesales them to her for $3.50 each for orders in excrs of 250 CDs and $4.00 for smaller orders. l'here is a S10.00 processing and delivery charge for each shipment, regardless of its size. Sarah D finances her orders on her MasterCard with an annual interest rate of 20%. New York State has a real property tax of 5% on annual inventory value. Sarah D currently buys 200 CDs every week.
a. Evaluate Sarah D's current inventory management. Give her a better inventory management plan if there is a better one.