Using the same information as in Problem 21, develop the best policies for a periodic review system.

a. What value of P gives the same approximate number of orders per year as the EOQ? Round to the nearest week.

b. What safety stock and target inventory level provide an 88 percent cycle-service level?

Data from problem 21

A company begins a review of ordering policies for its continuous review system by checking the current policies for a sample of SKUs. Following are the characteristics of one item.

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Demand (D) = 64 units/week (Assume 52 weeks per year) Ordering or setup cost (S) = $50/order Holding cost (H) = $13/unit/year Lead time (Z) = 2 weeks Standard deviation of weekly demand = 12 units Cycle-service level = 88 percent