DaCosta Company makes a variety of household appliances, including dust-busters. Plastic handles used in making dust-busters are purchased from an outside supplier. Each year, 20,000 handles are used, at the rate of 80 handles per day. However, some days as many as 90 handles are used. It takes DaCosta 3 days from the time of order to the time of arrival of the order.
Required:
1. Calculate the reorder point without safety stock.
2. Calculate the amount of safety stock.
3. Calculate the reorder point with safety stock.