Question: Please solve this question. Executive Dry Cleaner operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases

Please solve this question. Executive Dry Cleaner

Please solve this question.

Executive Dry Cleaner operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases a detergent for $12 per bag. The following information is available about these bags. Demand = 90 bags/week. Order cost = $54/order. Annual holding cost = 30 percent of cost. Desired service level = 80 percent. Lead time = 3 weeks (18 working days). Standard deviation of weekly demand = 15 bags. a. What is the EOQ? (Round the answer.) What would be the average time between orders (in weeks)? b. What should the reorder point be? (Round up the answer.) C. The dry cleaner currently uses a lot size of 500 bags (i.e., Q = 500). What is the annual holding cost of this policy? Annual ordering cost? Without calculating the EOQ, how can you conclude from these two calculations that the current lot size is too large? (3 points) d. What would be the annual cost saved by shifting from the 500-bag lot size to the EO

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