Question: 1 . Petromax Enterprises uses a continuous review inventory control system for one of its SKUs. The following information is available on the item. The

1. Petromax Enterprises uses a continuous review inventory control system for one of its SKUs. The following information is available on the item. The firm operates 50 weeks a year. Demand =50,000 units/year Ordering cost = $35/order Holding cost = $2/unit/year Average lead time =3 weeks Standard deviation of weekly demand =125 units a) What is the economic order quantity for this item? b) If Petromax wants to provide a 90 percent cycle-service level, what should be the safety stock and the reorder point?

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