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Davie’s store purchases electronic components from a Los Angeles supplier for $150 per unit. He expects to use about 20 units per day; carrying cost is considered to be approximately 20% of the unit price. Davie estimates the cost of $50 to place an order and the lead time averages 7 days. (Assume 250 working days during year).
(a) What is the reorder point?
(b) What is the economic order quantity?
(C) What is the average inventory?
(d) What is the total inventory cost (=Ordering + Carrying)?
(e) What is the days per each cycle?
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