A golf specialty wholesaler operates 50 weeks per year. Management is trying to determine an inventory policy for its 1-irons, which have the following characteristics:
Demand (D) = 2,000 units/year.
Demand is normally distributed
Standard deviation of weekly demand =3 units
Ordering cost $40/order
Annual holding cost (H) = $5/units
Desired cycle-service level = 90%
Lead time (L) = 4 weeks
a. If the company uses a periodic review system, what should P and T be? Round P to the nearest week
b. If the company uses a continuous review system, what should R be?