# 6717661 - EOQ reorder point and safety stock Alexis Company...

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The product has a fixed cost of \$50 per order, and its carrying cost is \$2 per unit per year. It takes 5 da and the firm wishes to hold 10 days’ usage in inventory as a safety stock. 40000 200 daily usage.) Daily Usage 2.19 Average Inve 22 Reorder point is 11 units safety stock: (1) order cost, (2) carrying cost, (3) total inventory cost, (4) reorder point, (5) economic order quantity. Explain. Total inventory Cost and Reorder point will change if the firm does not carry inventory P14-6

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Unformatted text preview: EOQ, reorder point, and safety stock Alexis Company uses 800 units of a product per year on a continuous a. Calculate the EOQ. b. Determine the average level of inventory. (Note: Use a 365-day year to calculate c. Determine the reorder point . d. Indicate which of the following variables change if the firm does not hold the ays to receive a shipment after an order is placed, s basis. and the firm wishes to hold 10 days’ usage in inventory as a safety stock....
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