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Taizhou Products uses 800 units of a product per year on a continuous basis. The product has carrying costs of $50 per unit per year and order costs of $300 per order. It takes 30 days to receive a shipment after an order is placed and the firm requires a safety stock of 5 days usage in inventory.
(a) Calculate the economic order quantity (EOQ).
(b) Determine the reorder point. (Assume a 360-day year.)
Citric Acid Cycle
A series of chemical reactions used by aerobic organisms to generate energy through the oxidation of acetate into carbon dioxide.
ADP
Adenosine diphosphate, a molecule important in metabolism that is produced when ATP (adenosine triphosphate) is used for energy by cells.
Substrate-Level Phosphorylation
A metabolic process that produces ATP by transferring a phosphate group directly from a substrate molecule to ADP.
Citric Acid Cycle
An energy-generation method involving the conversion of acetate, sourced from carbohydrates, fats, and proteins, into carbon dioxide via a series of chemical reactions, utilized by all aerobic beings.
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