You work at a store that sells clocks. The store sells 7 clocks a day at a price of $80 each. The wholesaler sells the store the clocks for $31 each and it takes 17 days to receive an order after it is placed. The store manager also does not like inventory to get below 38 clocks. The district manager calculated the cost to create a purchase order to be $265 and inventory carrying costs are 14%. There are 365 days in a year.

Calculate the Economic Reorder Point for this example (round up to the nearest whole number):

EOQ =

R = Annual Demand

S = cost of placing one order

C = purchase cost per unit

k = holding rate (as a decimal percent)