Andrew and Fulton, Inc., uses 780 tons of a chemical bonding agent each year. Monthly demand fluctuates between 50 and 80 tons. The lead time for each order is one month, and the economic order quantity is 130 tons.
1. Determine the safety stock appropriate for the chemical bonding agent.
2. At what order point, in terms of tons remaining in inventory, should Andrew and Fulton, Inc., order the bonding agent?