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What is Tesla total annual inventory cost

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Question - Tesla uses a perpetual inventory system to make inventory decisions about a replacement part for a Model X. Annual demand has been forecast to be 2,200 units and the business operates 300 days per year. The standard deviation of daily demand has been forecast to be 25 units. The order lead time is 4 days. Tesla pays $7 to hold a unit for a year and $200 to place an order. Tesla's target service level is 98%. What is Tesla's total annual inventory cost?

Reference no: EM133041502

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