Question: PetSmart operates 48 weeks per year and uses a continuous review inventory system. It purchases dry dog food for $16 per bag. The following information

PetSmart operates 48 weeks per year and uses a continuous review inventory system. It purchases dry dog food for $16 per bag. The following information is available about these bags. Refer to the standard normal table at bottom of this page.

Average demand = 94 bags/week

Order cost = $40/order

Annual holding cost = 25 percent of the unit cost

Desired cycle-service level=89.97 percent

Lead time = 1 week constant

Standard deviation of weekly demand = 16 bags

Current on-hand inventory is 300 bags, with no open orders or backorders.

What is the amount of safety stock required to meet the desired service level? ____ bags (Enter your response rounded to the nearest whole number.)

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!