Question: Amazon uses a continuous review system and operates 52 weeks per year. One of the SKUs has the following characteristics. Demand (D) = 20,600 units/year
Amazon uses a continuous review system and operates 52 weeks per year. One of the SKUs has the following characteristics. Demand (D) = 20,600 units/year Ordering cost (S) = $43/order Holding cost (H) = $2.50/unit/year Lead time (L) = 3 week(s) Cycle-service level = 90%, z = 1.28 Demand is normally distributed, with a standard deviation of weekly demand of 103 units. Current on-hand inventory is 1,040 units, with no scheduled receipts and no backorders. What is the annual cost of placing orders? (Please wait and round at the end of the calculations, enter your response rounded to 2 decimal places.)
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