Given the following information, formulate an inventory management system The item is demanded 50 weeks a year item cost $7 00 Standard Deviation of weekly demand 20 units Order cost $181 00 order lead time 3 weeks Annual holding cost ( ) 34 of item cost Service probability 99 Annual demand 27,800 units Average demand 556 week a Determine the order quanitiy and reorder point (Use excel NORMSINV() function to find your z value and then round z value to 2 decimal places Do not not round any other intermediate calculation Round your final answers to the nearest whole number) Optimal order quantity Units Reorder point units b Determine the annual holding and order costs (Do not round ny intermediate calculations round your final answers to 2 decimal places) Holding cost Ordering cost C Assume a price break of $55 per order was offered for purchase quantities of 2,100 units per order If you took advantage of this price break, how much would you save annually (D not round any intermediate calculations (including number of setups per year) Round your final answer to 2 decimal places ) Annual savings

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Question: Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. item cost $7.00 Standard Deviation of weekly demand

Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year.

item cost $7.00	Standard Deviation of weekly demand 20 units
Order cost $181.00 / order	lead time 3 weeks
Annual holding cost (%) 34 % of item cost	Service probability 99%
Annual demand 27,800 units
Average demand 556/week

a. Determine the order quanitiy and reorder point. (Use excel NORMSINV() function to find your z-value and then round z-value to 2 decimal places. Do not not round any other intermediate calculation. Round your final answers to the nearest whole number)

Optimal order quantity	__	Units
Reorder point	__	units

b. Determine the annual holding and order costs. (Do not round ny intermediate calculations. round your final answers to 2 decimal places)

Holding cost	____
Ordering cost	____

C. Assume a price break of $55 per order was offered for purchase quantities of 2,100 units per order. If you took advantage of this price break, how much would you save annually? (D not round any intermediate calculations (including number of setups per year). Round your final answer to 2 decimal places.)

Annual savings

____

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