Question: Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. PARAMETER VALUE PARAMETER VALUE Item cost $ 10.00

Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. PARAMETER VALUE PARAMETER VALUE Item cost $ 10.00 Standard deviation of weekly demand 25 units Order cost $ 250.00 /order Lead time 1 week Annual holding cost 33 % of item cost Service probability 95 % Annual demand 25,750 units Average weekly demand 515 /week

a. Determine the order quantity and reorder point. (Use Excel's NORM.S.INV() function to find the z value. Round z value to 2 decimal places and final answer to the nearest whole number.)

b. Determine the annual holding and order costs. (Round intermediate calculations to 2 decimal places. Round your answers to 2 decimal places.)

c. Assume a price break of $50 per order was offered for purchase quantities of 2,000 or more units per order. If you took advantage of this price break, how much would you save annually? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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