Ameri-Gold Tire Company has a safety stock of 36 tires at a time it can sell 2250 tires a year over a 250 days it opens for business.
a. Calculate the Reorder Point if it takes 5 days for the new orders to arrive from the company’s warehouse to its retail store.
b. How many days would the “reorder point” last?
c. Find the Economic Order Quantity for the Ameri-Gold Tire Company if the annual cost of storing the inventory is 29.3% of the inventory cost, and it takes $15 to place an order, while the company sells each tire for $65.00.