Wildcat Tools is a distributor of hardware and electronics equipment. Their socket wrench inventory needs better management. The information regarding the wrenches is given below.

a. The company decides to use a continuous review system. What is the recommended reorder point, safety stock, and the economic order quantity?

b. Based on the information calculated in (a), should an order be placed? If yes, how much should be ordered?

c. The company wants to investigate the fixedperiod system with a twice-per-month review (P = two weeks or 0.5 months), how much safety stock is required?

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Demand-50 wrenches per month Lead time-One month Order cost-$20/order Holding cost-$2.40/wrench/year Backorder cost-$15/backorder Cycle-service level-90 percent Standard deviation of monthly demand-20 wrenches Current on-hand inventory is 65 wrenches, with no scheduled receipts and no backorders.