Question: Executive Dry Cleaner operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases a detergent for $12

Executive Dry Cleaner operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases a detergent for $12 per bag. The following information is available about these bags. Demand = 90 bags/week. Order cost = $54/order. Annual holding cost = 30 percent of cost. Desired service level = 80 percent. Lead time = 3 weeks (18 working days). Standard deviation of weekly demand = 15 bags.

Uses a periodic review system instead of a continuous system. The average daily demand is d = 90/6 = 15 bags/day and the standard deviation of daily demand is equal to d=156 = Executive Dry Cleaner operates 52 weeks per year, 6.124 bags.

What the time between replenishments (in working days) and the target inventory level should be? Set the time between replenishments equal to the time between replenishments from the EOQ model. (Round the answer.)
How much more safety stock is needed than with a continuous system?

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