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SAFETY STOCK

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SAFETY STOCK

Noble Manufacturing produces a component used in its production of clothes dryers. The time to set up and produce a batch of the components is two days. The average daily usage is 320 components, and the maximum daily usage is 375 components.
Required:
Compute the reorder point assuming that safety stock is carried by Noble Manufacturing. How much safety stock is carried by Noble?

SAFETY STOCK

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