a. Calculate the item's EOQ.

EOQ=___units. (Enter your response rounded to the nearest whole number.)

b. Use the EOQ to define the parameters of an appropriate continuous review and periodic review system for this item. Refer to the standard normal table when necessary.

Under a continuous review system, order __units whenever the inventory level drops to ___

units. (Enter your responses rounded to the nearest whole number.)

Under a periodic review system, order up to___ units every ___weeks. (Enter your responses rounded to the nearest wholenumber.)

c. Which system requires more safety stock and by how much? Select the correct choice below and fill in the answer box to complete your choice.

The ___review system requires___more units of safety stock than the

___review system. (Enter your response rounded to the nearest whole number.)

Your firm uses a periodic review system for all SKUs classified, using ABC analysis, as B or C items. Further, it uses a continuous review system for all SKUs classified as A items. The demand for a specific SKU, currently classified as an A item, has been dropping. You have been asked to evaluate the impact of moving the item from continuous review to periodic review. Assume your firm operates 52 weeks per year; the item's current characteristics are: Demand (D) = 14,040 units/year Ordering cost (S) = $120.00/order Holding cost (H) = $3.50/unit/year Lead time (L) = 8 weeks Cycle-service level = 96% Demand is normally distributed, with a standard deviation of weekly demand of 79 units. a. Calculate the item's EO