Fixed order quantity inventory control system helps monitor

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Reference no: EM132108826

High Tech, Inc. is a virtual store that stocks a variety of calculators in their warehouse. Customer orders are placed, the order is picked and packaged, 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

Unit cost $8.00

Carrying charge rate 0.15

Number of weeks 52 weeks per year

Standard deviation of weekly demand 3.75 calculators

SKU service level 90 percent

Current on-hand inventory 35 calculators

Scheduled receipts 20 calculators

Backorders 2 calculators

What is the Economic Order Quantity?

Reference no: EM132108826

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