Question: please help! Sam's Cat Hotel operates 50 weeks per year, 6 days per week, and uses a continuous review inventory system it purchases kitty litter
please help!
Sam's Cat Hotel operates 50 weeks per year, 6 days per week, and uses a continuous review inventory system it purchases kitty litter for $12.50 per bag. The following information is avallable about these bags: - Demand =70 bags/week - Order cost =$52.00 /order - Annual holding cost =30 percent of cost - Desired cycleservice level = 80 percent - Lead time =4 weeks (24 working days) - Standard deviation of weekly demand =15 bags > Current on-hand inventory is 320 bags, with no open orders or backorders a. Suppose that the weekly demand forecast of 70 bags is incorrect and actual demand averages only 45 bags per week. How much higher will total costs be, ow to the distorted EOQ caused by this forecast error? The costs will be 5 higher owing to the error in EOQ. (Enter your response rounded to two decimal places)
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