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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. Please provide formulas and caluculations.
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