Question: Petromax Enterprises uses a continuous review inventory control system for one of its SKUs. The following information is available on the item. The firm operates

Petromax Enterprises uses a continuous review inventory control system for one of its SKUs. The following information is available on the item. The firm operates 52 weeks in a year. Refer to the standard normal table for z-values.
Demand =91 comma 000units/year
Ordering cost=$38.50/order
Holding cost=$4.50/unit/year
Average lead time=1 week
Standard deviation of weekly demand=250 units
a. The economic order quantity for this time is units?
b. If Petromax wants to provide a 99% service level, the safety stock is? and the reorder point is?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!