Determine the firm safety stock if the normal usage

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Reference no: EM132706491

Given are the data for the Inventory Company: Average re-order period 25 days Optimum number of order per year 10 per year Average daily usage 4 units Cost to store one unit per year P5 Cost of stock out per unit per time P20

Usage during re-order period / Frequency

80 4

90 6

100 10

115 35

125 20

150 15

175 10

REQUIRED:

Problem 1. What is the re-order point should the company desire a 90% safety from stock-out?

Problem 2. Determine the firm's safety stock if the normal usage is 100.

Reference no: EM132706491

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