RightTime (RT) Corporation operates a retail store featuring wristwatches. It maintains an EOQ decision model to make inventory decisions. Currently, it is considering inventory decisions for its TagMe wristwatches product line, which is very popular. Data for 2020 are as follows:

Expected annual demand for TagMe watches...........................................7,000
Ordering cost per purchase order................................................................$300
                          Carrying cost per year.....................................................................................$14 per wristwatch

Each watch costs RT $75 and sells for $200. The $14 carrying cost per watch per year consists of the required return on investment of $9.00 (12% * $75 purchase price) plus $5.00 in relevant insurance, handling, and storage costs. The purchasing lead time is 10 days. RT is open 365 days a year.

Required

1. Calculate the EOQ.
2. Calculate the number of orders that will be placed each year.
3. Calculate the reorder point.