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A retail shop sells 500 pairs of shoes each year. Each pair of shoes is priced at $50. Suppose that the shop can get each pair of shoes from their supplier at $20 and the ordering cost, regardless of quantity, is $50. The lead time for each order is 7 calendar days. The annual holding cost of each pair of shoes is $2. Assuming that the demand is uniform across the year:
a) Compute the economic order quantity.
b) Compute the reorder point.
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