Appliance for Less is a local appliance store

Sociology May 04, 2022

Appliance for Less is a local appliance store. It costs this store $15.88 per unit annually for storage, insurance, etc., to hold microwave in their inventory. Sales this year are anticipated to be 247 units. Each order costs $67. The company is using Economic Order Quantity model in placing the orders.

It takes approximately 3 day(s) to receive an order after it has been placed. If the store insists on a 5 day(s) safety stock (assume 365-days a year), what should the inventory level be when a new order is placed?

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