Mobius Designs is a construction company that must carry inventory of cement to fulfil their projects. They expect their annual demand to be 10,000 tanks of cement. Assume that they operate 52 weeks a year. Each time they place an order it costs $35. Factoring in the cost of capital and storage, leads to a holding cost of $4 per unit per year. Once the manager places an order, he must wait 3 weeks before he receives his order.
Using the fixed quantity inventory system strategy, determine the optimal reorder point.