The materials manager of an ambulatory surgery center is looking to determine the appropriate order quantity and reorder points for customized surgical kits. Ordering custom surgical kits costs $150 per order, and the annual holding cost is 10 percent of the product cost. Annual demand for surgical kits is 3,600 and the purchase price is $200. Lead time for delivery is two weeks.

What is the economic order quantity for surgical kits?

Assuming that there are 365 days per year, how many orders will be placed each year if he follows the EOQ model?

Assuming that there are 365 days per year, what is the reorder point if no safety stock is needed?

Assuming that there are 365 days per year and the desired service level is 95%, what is the new reorder point incuding the safety stock?