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The University Gift Shop purchases sweatshirts emblazoned with the school's name and logo from a vendor in Toronto. The vendor sells the sweatshirts to the
The University Gift Shop purchases sweatshirts emblazoned with the school's name and logo from a vendor in Toronto. The vendor sells the sweatshirts to the Gift Shop for $34.99 a piece. Shipping from Toronto to London costs $110 per order. When an order arrives, it has been estimated that receiving an inspection tasks cost the Gift Shop \$25. The annual holding cost for a sweatshirt is calculated as 11% the purchase cost. The Gift Shop manager estimates that 3100 sweatshirts will be sold during the upcoming academic year. Assume that there are 260 business days a year. If the economic order quantity is 500 , what is the reorder point if the lead time is 3 business days? A. 36 B. 6 C. 25.5 D. 4.1
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