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Question - Basketball Inc., operates a megastore featuring sports merchandise. It uses EOQ decision model to make inventory decisions for its PBA's jersey product line. This is a highly popular item. Data for 2014 are:
Expected annual demand for PBA 10,000
Ordering cost for purchase order P225
Carrying cost per year P10 per jersey
Each jersey costs Basketball Inc. P40 (12% x P40 purchase price plus P5.20 in relevant insurance, handling, and theft-related costs. The purchasing lead time is 7 days. Basketball Inc. is open 365 a year.
What is the reorder point?
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