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At Dot Com, a large retailer of popular books, demand is constant at 32,000 books per year. The cost of placing an order to replenish stock is $10, and the annual cost of holding is $4 per book. Stock is received 5 working days after an order has been placed. No backordering is allowed. Assume 300 working days a year.
- What is Dot Com’s optimal order quantity?
- What is the optimal number of orders per year?
- What is the optimal interval (in working days) between orders?
- What is demand during the lead time?
- What is the reorder point?
- What is the inventory position immediately after an order has been placed?
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