HighLife Corporation Has the Following Information: Average Demand = 30

Multiple Choice

HighLife Corporation has the following information: Average demand = 30 units per day
Average lead time = 40 days
Item unit cost = $45 for orders of less than 400 units
Item unit cost = $40 for orders of 400 units or more
Ordering cost = $50
Inventory carrying cost = 15 percent
The business year is 300 days.
Standard deviation of demand during lead time = 90
Desired service level = 95 percent
What is the EOQ if HighLife pays $45/unit? Due to possible differences in rounding,choose the closest answer.

A) 287
B) 300
C) 365
D) 398