A Company Distributes Repair Parts for High-End Appliances

question 63

Short Answer

A company distributes repair parts for high-end appliances. The annual demand is 81,000 and the company operates 300 days per year. The annual carrying cost is 20% of the item cost, which is $500. The ordering cost is estimated at $60 and the shortage cost is $150.
-If the daily demand is 25 and the lead time in days is 4, what is the reorder point?

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