1. Fine Garments Case: (2 marks)

The Fine Garments Company sells fashion clothing. The forecasted annual demand for its premium leather jacket is 1200. The order processing cost per da is $25, and the inventory holding cost is $50/item/year.

The company wants to use a reorder point system. It has the order quantity set at 35. To allow for uncertainties in delivery and in customer demand it wishes to hold 4 weeks of demand as safety stock. What should its reorder point be if the delivery lead time is 2 weeks?