Your firm uses the continuous review system to manage a product, and operates 52 weeks a...

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Your firm uses the continuous review system to manage a product, and operates 52 weeks a year. The product has the following characteristics: Ordering cost $40 per order Inventory-holding cost = $5 per unit per year %3D Leadtime = 4 weeks Weekly demand is normally distributed with mean 200 and standard deviation 12. You want to satisfy a 95% probability of not running out of stock in any one ordering cycle. (Note! z 95=1.65) (a) What is the average demand during leadtime? units (b) What should be the safety stock? Answer with a whole number. units (c) What should be the reorder point? Answer with a whole number. units (d) What should be the order quantity? Answer with a whole number. units Your firm uses the continuous review system to manage a product, and operates 52 weeks a year. The product has the following characteristics: Ordering cost $40 per order Inventory-holding cost = $5 per unit per year %3D Leadtime = 4 weeks Weekly demand is normally distributed with mean 200 and standard deviation 12. You want to satisfy a 95% probability of not running out of stock in any one ordering cycle. (Note! z 95=1.65) (a) What is the average demand during leadtime? units (b) What should be the safety stock? Answer with a whole number. units (c) What should be the reorder point? Answer with a whole number. units (d) What should be the order quantity? Answer with a whole number. units

Answer rating: 100% (QA)

Answer a Average demand during lead time 800 unit Answer b Safety stock 40 unit ... View the full answer