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An appliance store carries a certain brand of TV which has the following characteristics:
Average annual sales = 100 units
Ordering cost = 25 per order
Carrying cost = 25 per cent per year
Item cost = $ 400 per unit
Lead time = 4 days
Standard deviation of the daily demand = 0.l unit working days per year = 250
a) Determine the EOQ
b) Calculate the reorder point for a 95% service levels assessing normal demand.
c) How tar apart would orders be placed on average?
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