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 for z-values.
Demand= 83,200 units/year
Ordering cost = $38.00/order
Holding cost = $2.50/unit/year
Average lead time = 4 weeks
Standard deviation of weekly demand = 250 units
a.) The economic order quantity for this item Is _____ units.
b. If Petromax wants to provide a 90% service level, the safety stock is ____ units.
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