Question: Instructions: Clearly write down the formula you use; Show all the steps, including the intermediate ones; Clearly indicate your final answer (with the associated unit

Instructions: Clearly write down the formula you

Instructions: Clearly write down the formula you use; Show all the steps, including the intermediate ones; Clearly indicate your final answer (with the associated unit whenever applicable) to the question; You can round the numbers up to 2 decimal places for all calculations. Question 2: The SCO Company sells desks that have a demand of 4 units per month and cost $25 each, the annual carrying charge is 30 percent of the product value, and it costs $15 to place an order. The standard deviation of demand has been 4 units per month, and the replenishment lead time is 2 months, a 90 percent service level is desired. For Parts (a) and (b) below, calculate the two key decisions under each inventory management system, and describe their implementations. (For example, the implementation of a basic EOQ system with reorder point R and order quantity Q will be: When the inventory level drops to the reorder point R, a new order of size Q will be placed). (a) How will you design a continuous review system? (b) How will you design a periodic review system? SCO 3001 Formula Sheet - Inventory Management Service level Total Cost = S Service factor + Sprice H 85.00% 1.04 EOQ 86.00% 1.08 87.00% 1.13 2 SD Q= 2 SD = ic H 88.00% 1.17 R= L XD 89.00% 1.23 90.00% 1.28 91.00% 1.34 Q-system 92.00% 1.41 2SD Q = 2 SD ic H 93.00% 1.48 R = L XD+ZOVI 94.00% 1.55 95.00% 1.64 96.00% 1.75 P-system 97.00% 1.88 2 SD 2 SD Pall 98.00% 2.05 ic H 99.00% 2.33 T (P +L) XD +ZO VP+ L

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