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Determine the average level of inventory

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Reference no: EM132813623

Alexis Company uses 648 units of a product per year on a continuous basis. The product has a fixed cost of ?$56 per? order, and its carrying cost is ?$4 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.

Calculate the EOQ.

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

Determine the reorder point.

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.

Reference no: EM132813623

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