Assume no safety stock or service level requirement. In order not to run out of stock before the receipt of a new order, at what inventory level should the firm place an order? That is, what is the reorder point equal to?
unit cost = $25
annual carrying charge = 10%
annual demand = 4000 units
ordering cost = $15 per order
Assume that there are 50 weeks in the work year and 5 working days per week
The lead-time for the product is 2 working weeks