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Appliance for Less is a local appliance store. It costs this store $23.61 per unit annually for storage, insurance, etc., to hold microwave in their inventory. Sales this year are anticipated to be 585 units. Each order costs $82. The company is using Economic Order Quantity model in placing the orders.
Problem 1: It takes approximately 3 day to receive an order after it has been placed. If the store insists on a 4 days safety stock (assume 365-days a year), what should the inventory level be when a new order is placed?
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