Question

A tire shop changes about 4,250 tires per year, 14 percent of which are off-road tires. All off-road tires are purchased from an outside supplier at a cost of $75

each. The shop uses a holding cost based on a 18 percent annual interest rate. The setup cost for placing an order is estimated to be $20.If the replenishment lead time is six weeks, what is the reorder point based on the level of on-hand inventory? (Round to the nearest integer)

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