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d = Average Demand Rate per Time Period D = Demand Rate per Year L = Average Lead time (time periods) SS = Safety Stock = z al 99.99% 99.90% 99.00% 95.00% 90.00% 85.00% 80.00% 3.719 3.090 2.326 1.645 1.282 1.036 0.842 al = Loa (Assuming Lead Time is constant as in Periodic review) a = Standard Deviation of the demand z = Number of Standard deviations corresponding to a service level Q = Order Quantity Average Inventory Level = Q/2 + SS H = Holding Cost Per Year Per Unit S = Ordering/Setup Cost Per Order Total Annual Inventory Cost = ($)h + s + H(SS) 2DS H Time Between Economic Order QuantityAEOQ = EOQ Orders = TBO = D CA 134 gallons of paint B. 409 gallons of paint 388 gallons of paint D 671 gallons of paint E. S4 gallons of paint Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of all the paint located at each of their 15 stores and their distribution warehouse. The Paint Supply Store franchise sells an average of 52 gallons of Yellow Paint every week (for 52 weeks per year). They purchase Yellow Paint from their supplier at a price of $3.00 per gallon. [The company does not hold Safety Stock] it takes 1.75 weeks to receive an order from the supplier. Administrative costs for Ordering paint have been estimated to be $25 per order. Holding Costs = 30% of the purchase price per gallon per year. What is the most Economic Order Quantity? Reorder Point, ROP = dL + SS Service Level z Value 99.99% 3.719 d = Average Demand Rate per Time Period 99.90% 3.090 D = Demand Rate per Year 99.00% 2326 LAverage Lead time (time periods) 95.00% 1.645 SS Safety Stock = 20 al 90.00% 1.282 85.00% 1.036 0.- 1.02 80.00% 0.842 (Assuming Lead Time is constant as in Periodic review) 04 Standard Deviation of the demand z = Number of Standard deviations corresponding to a service level Q - Order Quantity Average Inventory Level 0/2 +55 H = Holding Cost Per Year Per Unit SOrdering/Setup Cost Per Order 10 in