Question: A. With what inventory level ( reorder point ROP ) a company should order new (replenishment) material if a lead time is 3 days, reviewing

A. With what inventory level (reorder point ROP) a company should order new (replenishment) material if a lead time is 3 days, reviewing period is 1 day, daily average demand is 10 items of material with a standard deviation of 3 items, and service level is expected to be 97.5% (number of standard normal deviates z=1.96)?

ROP =

b. Demand for a standard material in a production company is 3200 units. The price of one unit is 200 z. Reordering cost is 50 z., and yearly holding material inventory unit cost is equal to 25% of the material unit price. The yearly inflation rate for the material price is 5%. What is an economic order quantity (EOQ) for this material?

EOQ =

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