High Tech Inc. is a virtual store that stocks a variety of calculators in their warehouse. Customer orders are placed, the order is picked an dpackaged, and then shipped to the customer. A fixed order quantity inventory control system (FQS) helps monitor and control these SKUs. The following information is for one of the calculators that they stock, sell and ship.
Average demand- 12.5 calculators per week
Lead time- 3 weeks
Order cost- $20/order
Holding cost- 1.20/calculator/year
Number of weeks- 52 weeks per year
Standard deviation of weekly demand- 3.75 calculators
SKU service level- 90%
Curront on-hand inventory-- 35 calculators
Scheduled receipts- 20 calculators
Backorders- 2 calculators
-- What is the reorder point with safety stock?
-- Based on the previous info, should a fixed order quantity be placed, and if so, for how many calculators?