Question - Appliance for Less is a local appliance store. It costs this store $16.78 per unit annually for storage, insurance, etc., to hold microwave in their inventory. Sales this year are anticipated to be 229 units. Each order costs $60. The company is using Economic Order Quantity model in placing the orders.
It takes approximately 4 day(s) to receive an order after it has been placed. If the store insists on a 3 day(s) safety stock (assume 365-days a year), what should the inventory level be when a new order is placed?