Average Demand	12.5 calculators per week
Lead time	3 weeks
Order cost	$20/order
Unit Cost	$8.00
Carrying charge rate	0.25
Standard deviation of weekly demand	3.75 calculators
SKU service level	95 percent
Current on-hand inventory	35 calculators
Scheduled Receipts	20 calculators
Backorders	2 calculators

Answer the following questions based on the above information:

1. What is the economic order quantity?
2. What are the total annual order and inventory-holding costs for the EOQ?
3. What is the reorder point without safety stock?
4. What is the reorder point with safety stock?
5. Based on the previous information, should a fixed-order quantity be placed, and if so, for how many calculators?
   • Hint: Use the formula IP = OH + SR - BO