Question: *High Tech Inc. is a virtual store that stocks a variety of calculators in its warehouse. Customer orders are placed; the orders are picked and
*High Tech Inc. is a virtual store that stocks a variety of calculators in its warehouse. Customer orders are placed; the orders are picked and packaged; and then orders are shipped to the customers. A fixed-order-quantity inventory control system (FQS) helps monitor and control these SKUs. The following information is for one of the calculators that High Tech stocks, sells, and ships.
| Average demand | 12.5 calculators per week |
| Lead time | 3 weeks |
| Order cost | $20/order |
| Unit cost | $8.00 |
| Carrying charge rate | 0.25 |
| Number of weeks | 52 weeks per year |
| 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 |
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What are the economic order quantity?
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What are the total annual order and inventory-holding costs for the EOQ?
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What is the reorder point without safety stock?
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What is the reorder point with safety stock?
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