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# A company begins a review of ordering policies for its continuous review system by checking the cur- rent policies for a sample of SKUS. Following are the characteristics of one item. 3 Demand (D) = 64 units/week (Assume 52

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## A company begins a review of ordering policies for its continuous review system by checking the cur- rent policies for a sample of SKUS. Following are the characteristics of one item. 3 Demand (D) = 64 units/week (Assume 52 weeks per year) Ordering or setup cost (S) = $50/order Holding cost (H) = $13/unit/year Lead time (L) = 2 weeks Standard deviation of weekly demand = 12 units Cycle-service level = 88 percent A company begins a review of ordering policies for its continuous review system by checking the cur- rent policies for a sample of SKUS. Following are the characteristics of one item. 3 Demand (D) = 64 units/week (Assume 52 weeks per year) Ordering or setup cost (S) = $50/order Holding cost (H) = $13/unit/year Lead time (L) = 2 weeks Standard deviation of weekly demand = 12 units Cycle-service level = 88 percent a. What is the EOQ for this item? b. What is the desired safety stock? c. What is the reorder point? d. What are the cost implications if the current policy for this item is Q = 200 and R = 180? a. What is the EOQ for this item? b. What is the desired safety stock? c. What is the reorder point? d. What are the cost implications if the current policy for this item is Q = 200 and R = 180?

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