1. Brenda opened a pool and spa store in a lively shopping mall and finds business to be booming but she often stocks out of key items customers want. She decides to experiment with inventory control methods, such as using a continuous review (fixed-order quantity) and/or periodic review (fixed-order period) system. The 28-ounce bottle of Super Algaecide (SA) is a high margin SKU, but it stocks out frequently. Ten SA bottles come in each box, and she orders boxes from a vendor 160 miles away. Brenda is busy running the store and seldom has time to review store inventory status and order the right quantity at the right time. She collected the following data:

Demand = 8 boxes per week	Store open = 48 weeks/year
Order cost = $24/order	Lead-time = 4 weeks
Item cost = $48/box	Std. deviation in weekly demand = 4
Inventory-holding cost = 25 percent year	Service level = 90 percent

What is the economic order quantity (EOQ) rounded to the next highest number? Round to the nearest whole number.

________boxes

What is the reorder point for SA with safety stock? Use Appendix A to determine z-value. Round z-value to two decimal places. Do not round intermediate calculations. Round your answer to one decimal place.

__________ boxes

What is the average number of orders per year using the EOQ? Do not round intermediate calculations. Round your answer to two decimal places.

_________orders/year

2. Brenda opened a pool and spa store in a lively shopping mall and finds business to be booming but she often stocks out of key items customers want. The 28-ounce bottle of Super Algaecide (SA) is a high margin SKU, but it stocks out frequently. Ten SA bottles come in each box, and she orders boxes from a vendor 160 miles away. Brenda is busy running the store and seldom has time to review store inventory status and order the right quantity at the right time. She collected the following data:

Demand = 6 boxes per week	Store open = 48 weeks/year
Order cost = $40/order	Lead-time = 2 weeks
Item cost = $80/box	Std. deviation in weekly demand = 8
Inventory-holding cost = 15 percent per year	Service level = 91 percent

Brenda wants to consider setting up a fixed-period inventory system for the 28-ounce bottle of Super Algaecide (SA) SKU. At the beginning of the current week, D. J. Kole, the materials manager, checked the inventory level and found 45 units on-hand. There were no scheduled receipts and 30 units were on backorder.

What is the review period (T)? Do not round intermediate calculations. Round your answer up to the nearest whole number.

_____weeks

What is stock replenishment level with safety stock (M)? Do not round intermediate calculations. Round your answer to the nearest whole number.

_______ bottles

How many units should be ordered? Do not round intermediate calculations. Round your answer to the nearest whole number.

_______orders/year