Question: 2.2 Petromax Enterprises uses a continuous review inventory control system for one of its SKUs. The following information is available on the item. The firm

2.2 Petromax Enterprises uses a continuous review

2.2 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? Hint: z=1.28

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