Question: Info from Previous problem Inventory Information for Shower Cleanser The Cost of a Gallon of the Cleanser Annual Holding Cost (as a % of Cost).



Info from Previous problem

Info from Previous problem Inventory Information

Inventory Information for Shower Cleanser The Cost of a Gallon of the Cleanser Annual Holding Cost (as a % of Cost). Cost to place an Order Average Daily Demand in gallons) Current Order Quantity $9.95 18% $15.00 1000 6000 Number of working days (N)=365 Annual Demand (D) = 1000 x 365 = 365000 Holding Cost (H)= 18% x 9.95 = 1.79 The Purchasing manager at the Hotel Chain in problem 9 has also decided to calculate a reorder point. Additional research revealed that the standard deviation of the daily demand is 120 gallons. The lead time to receive an order from the supplier is 10 days. The table from problem 9 is provided below for your convenience. Inventory Information for Shower Cleanser The Cost of a Gallon of the Cleanser $9.95 Annual Holding Cost (as a % of Cost) 18% Cost to place an Order $15.00 Average Daily Demand in gallons) 1000 Current Order Quantity 6000 1. If the manager wanted a 95% customer service level what would be its reorder point? 2. Assume the manager decides to go with a 95% customer service level and use the EOQ quantity from problem 9. What is the total cost associated with ordering and holding inventory for this item

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