Question: A warehouse manager must set up inventory ordering systems for two new distribution items, x and Y . Item x can be ordered at any
A warehouse manager must set up inventory ordering systems for two new
distribution items, and Item can be ordered at any time, but item can
only be ordered once every three weeks. The company operates weeks a year
and the weekly demand for both items is normally distributed. The manager has
gathered the following information about the items:
a When should the manager reorder each item?
b Compute the order quantity for Item X
c Compute the order quantity for Item if units are on hand at the time
the order is placed.
d Compute the optimal order interval for Item Y ie the current threeweek
order interval may not be optimal
e Compute the savings in average inventory carrying costs if Item can be
ordered at any time rather than once every three weeks
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