# EOQ, lead time demand information;safety stock;reorder point

Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year.

_________________________________________________________________

Item cost $10.00 Standard deviation of

Order cost $250.00 weekly demand 25 per week

Annual holding cost (%) 33% of item cost Lead time 1 week

Annual demand 25,750 Service probability 95%

Average demand 515 per week

____________________________________________________________________

a. State the order quantity and reorder point.

#### Solution Summary

This post shows how to calculate EOQ, lead time demand information, calculate the safety stock based on S.L. and reorder point