H.R. Prewett Limited forecasts the demand for one component to average 18 a day over a 200-day working year. If there are any shortages, production will be disrupted with very high costs. The total cost of placing an order is £800 and holding costs are £400 a unit a year. What is the best inventory policy for the component? How does this compare with the option of making the component internally at a rate of 80 units a day?