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You are the operations manager of a firm that uses the continuous review inventory control system. Suppose the firm operates 252 days a year and
You are the operations manager of a firm that uses the continuous review inventory control system. Suppose the firm operates 252 days a year and has the following characteristics for its primary item:
Demand = 25,000 units/year
Ordering cost = $33/order
Holding cost = $1/unit/year
Lead time = 4 days
Standard deviation in daily demand = 5 units
Service level = 95% (z=1.65)
What is the reorder point?
(Please round your calculations to the nearest whole number.)
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