Jake Welch has a computer store with an annual demand forecasted at 600 units and holding cost is $20 per unit per year and the ordering cost is $60 per order. Currently they order once a month, 50 units per order. They work 250 days a year and the lead-time is 10 days. They want to keep 10 printers as a safety stock.
1. What is the current total cost of inventory - with orders of 50 units?
2. What is the optimal order size? What would the total cost be?
3. What is the reorder point?