High Tech Inc. (p. 237, #10) 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 Stock Keeping Units (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
Backorders	2 calculators

1. What is the economic order quantity?

2. What are the total annual order and inventory holding costs for 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?