Question: Brussels Inc uses the Continuous Review System for managing its inventory. The annual demand for its product is 18,000 units. Cost to hold 1 unit

  1. Brussels Inc uses the Continuous Review System for managing its inventory. The annual demand for its product is 18,000 units. Cost to hold 1 unit of inventory for 1 year is $10.50 and the cost it incurs to place an order is $60.00. The weekly demand rate for the item is 100 units and standard deviation of weekly demand is 24 units. The lead time to receive items ordered from its suppliers is 3 weeks. It guarantees its customers that 97.5% of the time they place an order, they would be able to provide the item. Determine the following:
  1. The Economic Order Quantity (EOQ) in units
  2. The optimal time between orders in weeks, assuming there are 52 weeks per year
  3. The safety stock and reorder point (both in units)

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