ABC Corp uses EOQ Model to minimize its Total cost of Inventory Mgt. It wants to

Question

ABC Corp uses EOQ Model to minimize its Total cost of Inventory Mgt. It wants to avoid Stock out 97% of the time. It has a delivery time of 5 days to get the supply of inventory. During the delivery period the Inventory Manager has calculated that it uses on average of 60+/-8 items daily. As a new hire with the ABC, the Inventory Manager has asked to calculate the Reorder Point (ROP) i.e. the reaming quantity of inventory when the order for the EOQ would be placed. According your calculation, the approximate ROP is:

Explanation / Answer

(d)42.84

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