Determine the amount of safety stock and Reorder point

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Reference no: EM13926836

Books, etc., a nationwide chain of bookstores, anticipates that annual demand for the paperback version of a best-selling novel will be 150,000 copies. The books cost the firm $2 each. Books, etc. has determined that the optimal order quantity (EOQ) is 30,000 copies. It takes 20 days between when an order is placed and when the deliv- ery is received. Carrying costs are 15 percent of the inventory value. Determine the following:

a. Optimal ordering frequency

b. Average inventory and annual carrying costs

c. Reorder point.

Books, etc. decides that it wants to maintain a 60-day safety stock of the novel to meet unexpected demand and possible shipment delays from the publisher. Determine the following:

d. Amount of safety stock, in units

e. Average inventory and annual carrying costs

f. Reorder point.

Reference no: EM13926836

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