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At Ionic, a large retailer of popular electronics, demand is constant at 32,000 devices per year. The cost of placing an order to replenish stock is $10, and annual cost of holding a device is $4 per device. Stock is received 5 working days after an order has been placed. No backordering is allowed. Assume 300 working days a year.
a. What is Ionic's optimal order quantity?
b. What is the optimal number of orders per year?
c. What is the optimal interval (in working days) between orders?
d. What is demand during the lead time?
e. What is the reorder point?
f. What is the inventory position immediately after an order has been placed?
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