Suppose that a periodic review (P) system is used at the distributor in Solved Problem 4, but otherwise the data are the same.
a. Calculate the P (in workdays, rounded to the nearest day) that gives approximately the same number of orders per year as the EOQ.
b. What is the target inventory level, T ? Compare the P system to the Q system in Solved Problem 4.
c. What is the total annual cost of the P system?
d. It is time to review the item. On-hand inventory is 40 mixers; receipt of 440 mixers is scheduled, and no backorders exist. How much should be reordered?

Data from Solved Problem 4

A regional distributor purchases discontinued appliances from various suppliers and then sells them on demand to retailers in the region. The distributor operates 5 days per week, 52 weeks per year. Only when it is open for business can orders be received. The following data are estimated for a countertop mixer:

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Average daily demand (7) = 100 mixers Standard deviation of daily demand (a) = 30 mixers Lead time (Z) = 3 days Holding cost (H) = $9.40/unit/year Ordering cost (S) = $35/order Cycle-service level = 92 percent The distributor uses a continuous review system.