McKay Company Produces Curling Irons

Essay

McKay Company produces curling irons. The plastic handles used to produce the curling irons are purchased from an outside supplier. Each year, 45,000 handles are used at the rate of 150 handles per day. Some days as many as 180 handles are used. On average it takes 4 days after an order is placed for the inventory to arrive at McKay Company.
Required:
A. Calculate the reorder point without safety stock.
B. Calculate the amount of safety stock.
C. Calculate the reorder point with safety stock.