Question: Given: HP DeskJet 7000C Printers Average weekly demand = 60 printers Standard deviation of weekly demand = 12 printers Order lead time = 3 weeks

Given: HP DeskJet 7000C Printers

Average weekly demand = 60 printers

Standard deviation of weekly demand = 12 printers

Order lead time = 3 weeks

Standard deviation of order lead time = 0 weeks

Item cost = $120/printer

Cost to place an order = $2

Yearly holding cost = $48/printer

Desired service level = 99% (z = 2.33)

Part a: What is the annual cost of holding inventory? How much is due to safety stock?

Part b: What is the new lead time is a constant 1 week. What is the new safety stock?

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