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Question: The Hastings Company is a nation-wide wholesaler for small electronic devices. One of its most popular items is a new GPS unit called the WAMI-1000. The company operates 365 days (52 weeks) in a year. Hastings has gathered the following information:
Average demand = 52,000 units/year
Standard deviation of yearly demand = 10,400 units
Average lead time = 5 weeks
Standard deviation of lead time= 1 week
Z (service level) =1.04
What is the optimal amount of reorder point for the company?
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