Question: Sniders Kitchen Witch sells all kinds of cooking equipment. Pizza stones are the most popular item with a demand normally distributed with a mean of 80 per week and a standard deviation of 15 per week. Sniders has ordering costs of $12 per order, and orders must be placed 1 week before delivery can be expected. Each pizza stone costs $2.88 and Sniders uses a 20% annual holding cost for its inventory.

a. What is the EOQ?

b. If Sniders wants to stock out no more than one time per year, what reorder point should be set?