D G Problem. Given the following information, formulate an inventory management system. The item is demanded so weeks a year. K 5 6 7 Item cost Order cost annual hold cost (%) Annual demand average demand Standard deviation of weekly demand lead time service probability Last Year $ 10.00 $ 250.00 33% of item cost 25,750 515 per week 25 per week 1 week 9594 9 10 11 12 14 a) state the order quality and re-order point. 15 Annual demand insert your formule in the blue cells below. Remember that all formulas begin with a 16 Annual holding cost (Si per unite 17 Ordering cost EOD (conomic order quantity 19 20 21 22 Average demand 23 Lead time 24 1.64 25 From Standard normal distribution, 2 Stand deviation durng lead time- Re order Point R-L+30) 26 27 28 30 29 b) determine the annual holding and order costs Annual demand EOQ Ordering cost (S) = Annual ordering Costs = 31 32 $0.00 33 S 34 35 $0.00 Annual holding cost(S) per unit = H Annual Holding Cost = 36 D A B C E c) if a price break of $50 per order was offered for purchase quantities of over 2,000, would you take advantage of it? 9 how much would you save annualy? .0 e H 51 Annual holding cost 2 42 D S 43 Annual ordering cost=0 44 D S 45 Total annual cost 2 46 47 Total annual cost with discount 48 49 Saving 50 would you take advantage of it? 51 52 53 54 55 56 Chapter 11 Problemi Problema