MGMT$-6085-21$S $-$ Assignment #$2$

Module $03-$ Chapter $03$

ROP & EOQ

Clyde$$s Cat Hotel

Clyde$$s Cat Hotel operates $52$ weeks per year, $7$ days per week, and uses a continuous review inventory system. It purchases Kitty Litter for $$11\mathrm{.}70$ per bag. The following information is available about these bags:

Demand $90$ bags$/$week

Order Cost $$54\mathrm{.}00$ per order

Annual Holding Cost $27\%$ of cost

Desired Cycle$-$Service Level $80\%$

Lead Time $3$ weeks $(21$ working days$)$

Standard Deviation of weekly demand $15$ bags

Current on Hand Inventory $320$ bags

Open Orders or Backorders $0$

SHOW YOUR CALCULATIONS

A$.$ What is the Economic Order Quantity $($EOQ$)$ for Kitty Litter at Clyde$$s$?($SEE TEXT PAGE $57)$