Taizhou Products uses 800 units of a product per year on a continuous basis. The product has carrying costs of $50 per unit per year and order costs of $300 per order.
It takes 30 days to receive a shipment after an order is placed and the firm requires a safety stock of 5 days usage in inventory.
(A) Calculate the economic order quantity (EOQ).
(B) Determine the reorder point. (Assume a 360 day year)