Jill's Job Shop buys the following Part (X-123) for use in its production system. The parts are
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Question:
Jill's Job Shop buys the following Part (X-123) for use in its production system. The parts are needed throughout the entire 52-week year. Data for the part are as follows:
| ITEM | X-123 |
| Annual demand | 10,000 |
| Holding cost per unit per year | $4 |
| Order cost | $300 |
| Lead time | 4 weeks |
| Safety stock | 100 units |
| Item cost | $10.00 |
a) Compute the optimal order quantity.
b) What is the reorder point for X-123?
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