Question: 3 . ) Sammy s wrenches is trying to create an inventory system for ordering it s # 1 0 ratchet. They sell 2 5

3.) Sammys wrenches is trying to create an inventory system for ordering its #10 ratchet. They sell 250 ratchets per week, with a standard deviation of 40(assume 52 weeks per year). Ratchets cost them $.40 each. Ordering cost is $40 per order. The holding cost rate is 25%. Lead time from their vendor is 2 weeks. Please calculate the following:
a. The EOQ amount for ratchets
b. If Sammy wanted to maintain a 97% service level, what ROP should be used?
c. What is the total cost of the system you calculated above (holding cost, ordering cost and safety stock).
d. If Sammy vendors offered them a price discount to $.35 each if they order in a bulk of 5,000 units, should they take it?

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