Question: A company is using continuous review system for its inventory. The average weekly demand is 64 units and the standard deviation of weekly demand is

A company is using continuous review system for its inventory. The average weekly demand is 64 units and the standard deviation of weekly demand is 12 units. The company operates 52 weeks per year. Ordering and setup cost is $50. Holding cost per units per year is $13. The lead time of orders is 2 weeks. The desired service level is 90%. a. If the current order quantity of this company is 200 units, what is the total inventory cost? b. What is the economic order quantity level for this company? How much saving in total does EOQ bring over the current policy? c. How much should the safety stock be? d. How much should the reorder point be?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

Question 5. A company is using continuous review system for its inventory. Due to the contracts made with the customers, the weekly demand is constantly 40 units. The average lead time of orders is 2...

A company is using continuous review system for its inventory. Due to the contracts made with the customers, the weekly demand is constantly 40 units. The average lead time of orders is 2 weeks and...

your new company has decided to use a periodic review system. you have learned that average weekly demand is 55 units per week with a standard deviation of 8. You believe that your cycle-service...

Your new company has decided to use a periodic review system. You have learned that average weekly demand is 48 units per week with a standard deviation of 8 units. You believe that your...

Your new company has decided to use a periodic review system. You have learned that average weekly demand is 43 units per week with a standard deviation of 9 units. You believe that your...

4 6 920 5 10 1800 6 8 1200 7 8 2700 8 4 1560 b. MKD to justify cost need e. If MI replenis 30. My Kitc the jars use is equal. As price. Mon two suppl as follows: 5 1.780 27. Your new company has...

Could you explain how you arrived at the correct answers? Thank you! 27. Your new company has decided to use a periodic review system You have learned that average weekly demand is 48 units per week...

Your new company has decided to use a periodic review system. You have learned that average weekly demand is 48 units per week with a standard deviation of 8 units. You believe that your...

27. Your new company has decided to use a periodic review system. You have learned that average weekly demand is 48 units per week with a standard deviation of 8 units. You believe that your...

please show work Your new company has decided to use a periodic review system. You have learned that average weekly demand is 40 units per week with a standard deviation of 7 units. You believe that...

Glenda Company uses a flexible budget for manufacturing overhead based on direct labor hours. For 2020, the master overhead budget for the Packaging Department based on 300,000 direct labor hours was...

Using the data in problem 7.5, determine the best process for each of the following volumes: (1) 75,000, (2) 275,000, and (3) 375,000. In problem 7.5, Meile Machine Shop, Inc., has a 1-year contract...

Aurora Synthwear is a high - end fashion startup that integrates wearable tech into their garments, such as reactive fabrics that change color with body temperature. This year, Aurora launched its...

108/31/20 63 out of 100 It is two weeks before finals and the campus coffee shop is anticipating a rush of student customers looking for their pre-study caffeine boost starting next week. To prepare,...