Sarah’s Muffler Shop has one standard muffler that fits a large variety of cars. Sarah wishes to establish a reorder point system

Sarah’s Muffler Shop has one standard muffler that fits a large variety of cars. Sarah wishes to establish a reorder point system.

Sarah’s Muffler Shop has one standard muffler that fits a large variety of cars. Sarah wishes to establish a reorder point system to manage inventory of this standard muffler. Use the following information to determine the best order size and the reorder point:

Annual demand 3,500 mufflers
Ordering cost $50 per order
Standard deviation of daily demand 6 mufflers per working day
Item cost $30 per muffler
Annual holding cost 25% of item value
Service probability 90%
Lead time 2 working days
Working days 300 per year

Sarah’s Muffler Shop has one standard muffler that fits a large variety of cars. Sarah wishes to establish a reorder point system

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