Solved: In order not to run out of stock before the receipt of a, Basic Statistics

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In order not to run out of stock before the receipt of a

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

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Basic Statistics: In order not to run out of stock before the receipt of a

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