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 48 weeks in a year. Refer to the standard normal table LOADING... for z-values.

Demand = 78,000 units/year

Ordering cost = $32.50/order

Holding cost = $4.00/unit/year

Average lead time = 4 weeks

Standard deviation of weekly demand = 250 units

a. The economic order quantity for this item is _ units. (Enter your response rounded to the nearest whole number.)

b. If Petromax wants to provide a 92% service level, the safety stock is _ units (enter your response rounded to the nearest whole number) and the reorder point is _ units (enter your response rounded to the nearest whole number).

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