Question: Hi, can you please answer questions A, B, C, D and E? 4 A Drug Company produces COVID quick tests at 2.95 per item. The

Hi, can you please answer questions A, B, C, D and E?

Hi, can you please answer questions A, B, C, D

4 A Drug Company produces COVID quick tests at 2.95 per item. The annual holding cost is 20% of the item cost. Using EOQ theory the company have calculated that the optimum order quantity is 300 items. The lead time to receive an order is one week with the demand normally distributed with a mean of 150 items and a standard deviation of 40 items per week. (a) What is the reorder point if the company is willing to tolerate a 1% chance of a stockout during an order cycle? (b) What amount of safety stock and annual safety stock cost are associated with the reorder point calculated in (a)? (c) The Company is considering changing to a periodic-review system to try to coordinate ordering of some of their products. The review period would be two weeks and the delivery lead time would stay at one week. What inventory level would be needed to ensure the risk of stockout stays at 1%? (d) What amount of safety stock and annual safety cost are associated with your solution to part c? (e) Compare your solutions to parts b and d. Do you recommend a continuous or a periodic review system

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