Question: Consider a basic economic order quantity (EOQ) model with the following characteristics: Item cost: $25. Item selling price: $30. Weekly demand: 120 units (constant) Annual

Consider a basic economic order quantity (EOQ) model with the following characteristics:

Item cost: $25.

Item selling price: $30.

Weekly demand: 120 units (constant)

Annual holding cost: 12% of purchase cost

Cost per order: $150.

Order lead time: 3 days

Firm's work year: 312 days (52 weeks @ 6 days per week)

Safety stock: 10% of weekly demand

The optimal Reorder Point, R*

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