Question: 16. Petromax Enterprises uses a continuous review inventory control system for one of its SKUs. The following information is available on the item. The firm

16. 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 in 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? Problem 3. Chapter 9 Pg. 363. Problem 16 (b). Fill in the blanks below. (Apts) Equation for ROP Plugin all #s into equation (above) ROP value Safety Stock value

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