am's Pet Hotel operates $52$ weeks per$$ year, $5$ days per$$ week, and uses a continuous review inventory system. It purchases kitty litter for $$$$10\mathrm{.}50$ per bag. The following information is available about these bags. Refer to the standard normal tableLOADING... for$$ z$-$values.

followsDemand $=100$bags$/$week

followsOrder cost$=$$$56/$order

followsAnnual holding cost$=28$ percent of cost

followsDesired $$cycle$-$service levelequals$98$ percent

followsLead time$=1$week$($s$)(5$ working$$ days$)$

followsStandard deviation of weekly demand$=18$ bags

followsCurrent $$on$-$hand inventory is $315$bags$,$ with no open orders or backorders.

Part $2$

a$.$ What is the$$ EOQ?

$$Sam$\text{'}$s optimal order quantity is

$$

enter your response here bags. $($Enter your response rounded to the nearest whole$$ number.$)$

Part $3$

What would be the average time between orders$($in weeks$)?$

The average time between orders is

$$

enter your response here weeks. $($Enter your response rounded to one decimal$$ place.$)$

Part $4$

b$.$ What should R $$be$?$

The reorder point is

$$

enter your response here bags. $($Enter your response rounded to the nearest whole$$ number.$)$

Part $5$

c$.$ An inventory withdrawal of $10$ bags was just made. Is it time to$$ reorder?

It

$$

is

is not

time to reorder.

Part $6$

d$.$ The store currently uses a lot size of $490$ bags$($i$.$e$.,$ Qequals$490).$ What is the annual holding cost of this$$ policy?

The annual holding cost is $$$

$$

enter your response here. $($Enter your response rounded to two decimal$$ places.$)$

Part $7$

What is the annual ordering$$ cost$?$

The annual ordering cost is $$$

$$

enter your response here. $($Enter your response rounded to two decimal$$ places.$)$

Part $8$

Without calculating the$$ EOQ, how can you conclude from these two calculations that the current lot size is too$$ large?

A$.$

When Q$=490,$ the annual holding cost is less then the ordering$$ cost$,$ therefore Q is too small.

B$.$

When Q$=490,$ the annual holding cost is larger than the ordering$$ cost$,$ therefore Q is too large.

C$.$

There is not enough information to determine this.

D$.$

Both quantities are appropriate.

Part $9$

e$.$ What would be the annual cost saved by shifting from the $490-$bag lot size to the$$ EOQ?

The annual holding cost with the EOQ is $$$

$$

enter your response here. $($Enter your response rounded to two decimal$$ places.$)$

Part $10$

The annual ordering cost with the EOQ is $$$

$$

enter your response here. $($Enter your response rounded to two decimal$$ places.$)$

Part $11$

$$Therefore$,$ Sam's Pet Hotel saves $$$

$$

enter your response here by shifting from the $490-$bag lot size to the EOQ. $($Enter your response rounded to two decimal$$ places.$)$

Sam's optimal order quantity isbags.The average time between orders isweeks.The reorder point isbags.Ittime to reorder.The annual holding cost is $$.($Enter your response rounded to two decimal places.The annual ordering cost is $$.($Enter your response rounded to two decimal places.Without calculating the EOQ, how can you conclude from these two calculations that the current lot size is too large?The annual holding cost with the EOQ is $$.($Enter your response rounded to two decimal places.The annual ordering cost with the EOQ is $$.($Enter your response rounded to two decimal places.Therefore, Sam's Pet Hotel saves $$490$