Determine the average level of inventory

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Reference no: EM131902253

?EOQ, reorder? point, and safety stock

Alexis Company uses 815 units of a product per year on a continuous basis. The product has a fixed cost of ?$44 per? order, and its carrying cost is ?$2 per unit per year. It takes 5 days to receive a shipment after an order is? placed, and the firm wishes to hold 10? days' usage in inventory as a safety stock.

a. Calculate the EOQ.

b. Determine the average level of inventory. ?(Note?: Use a? 365-day year to calculate daily? usage.)

c. Determine the reorder point.

d. Indicate which of the following variables change if the firm does not hold the safety? stock: (1) order? cost, (2) carrying? cost, (3) total inventory? cost, (4) reorder? point, (5) economic order quantity.

Round all answers to the nearest whole number.

Reference no: EM131902253

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