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At Dot Com, a large retailer of popular books, demand is constant at 20,400 books per year. The cost of placing an order to rd. The demand during lead time is books. (Enter your response rounded to the nearest whole number.) e. The reorder point is b

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Answer #1
Demand 20400 D
Ordering cost 75 $ S
Annual holding cost 5 $/book h
LT 15 days
Working days 250
a. Here optimal order quantity is EOQ i.e. Economic order quantity
EOQ = sqrt (2DS/h) =sqrt(2X20400X75/5)           783
b. Optimal no of orders per year = Demand/EOQ
=20400/783             27
c. The optimal interval in working days between orders
Since working days = 250;
time interval between orders = 250/no of orders = 250/27
       10.00
d. The demand during lead time is
Since demand for the year is 20400 and total working days is 250
Demand per day = 20400/250 81.6
So demand during lead time = demand per day X LT = 81.6X15 1224
e. The reorder point is when the stock reaches the lead time demand
So reorder point is 1224
f. The inventory position immediately after an order has been placed is 1224
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