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Cost per tire $35 each Holding cost 20 percent of tire cost per year Demand 1000 per year Ordering cost $20 per order Standard deviation

Cost per tire $35 each Holding cost 20 percent of tire cost per year Demand 1000 per year Ordering cost $20 per order Standard deviation of daily demand 3 tires Delivery lead time 4 days Because customers generally do not wait for tires but go elsewhere, you decide on a service probability of 98 percent. Assume the demand occurs 365 days per year. Determine the reorder point?

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