Question: Alexis Company uses 748 units of a product per year on a continuous basis. The product has a fixed cost of 57$ per order and a carrying cost of 3$ per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days' usage in inventory as a safety stock
a. Calculate the EOQ.
b. Determine the average level of inventory. (Note:Use a 365-day year to calculate daily usage.)
c. Determine the reorder point.
d. Indicate which of the following variables change if the firm does not hold the safety stock:
(1) order cost,
(2) carrying cost,
(3) total inventory cost,
(4) reorder point,
(5) economic order quantity. (multiple answer)