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The manager at the Challenger store in Clementi is planning for the inventory of their printers. Average demand for the printers is 50 units per day, ordering cost is $50 per order, unit price is $100, lead-time is 2 weeks, carrying/holding rate is 20%, and standard deviation of demand is 20 units per day. Consider 365 days per year. Assume the manager uses a fixed order quantity system. Compute the economic order quantity and the reorder point to have 90% service level. Explain your result.
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