The Reorder point system

timer Asked: Jan 21st, 2016

Question description

The forecasted annual demand for their premium leather jacket is 2,0000.The order-processing cost per order is $40, and the inventory holding cost is $35/item/year.

The fine garments company wants to use a reorder point system.To all for uncertainties I delivery and customer demand, it wishes to hold four weeks of demand as safety stock. What should it's reorder point be if the delivery lead time is two weeks, based on the calculated order quantity?

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