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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