1 rays satellite emporium wishes to determine the best

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1. Ray's Satellite Emporium wishes to determine the best order size for its best-selling satellite dish. Ray has estimated the annual demand for this model at 1,000 units. His cost to carry one unit is $100 per year per unit, and he has estimated that each order costs $25 to place. Using the EOQ model, how many should Ray order?  Please provide the formula, at least one step of calculation, and the correct order size.

2. Given the following information, formulate a continuous-review inventory management system. The item is demanded 50 weeks a year. 

Item cost

$10

Standard deviation of weekly demand

 

Order cost

$250

25 per week

Annual holding cost (%)

33% of item cost

Lead time

1 week

Annual demand

25,750

Service probability

95%

Average demand

515 per week

 

 

Compute the order quantity and reorder point.  

Reference no: EM13366967

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