Kumakari is a small furniture store the stores most popular item is the stickley chair the chair cost 2,295 retail at 50% retail markup, and they sell 91 units annually. It accounts for nearly 12% of their annual revenue this is one item kumakari does not want to have out of stock. To help boost sells, salespeople earn a 10% commission per chair. The shipping cost from manufacturer to the furniture store averages $120 per chair. Kumakari sells 1 stickley cahir every 4 days and wants to keep a safety stock of 3 chairs. The lead time for the chairs is 20 days.
Besides furniture, kumakari sells handmade rugs from middle-eastern, soecifcally 12x15 bakhtiari style rugs. Generally the stire sells 50 premium hand knotted bakhitari rugs each year. Kumakari has a 50% mark-up on selling orice and sells the bakhitiaro rugs for $2500. It typically costs $500 to place an order for bakhitari rugs throygh a rug broker, and typically the store has a 10% annual carrying cost.
Refer to kumakari furniture scenario,
(a) determine kumakaris revenue per chair, (b) how much annual profit they earn off of chairs, (c) the reorder point for the stickley chairs and (d) determine the EOQ for the bakhitari rugs