Question: Problem #1 Managing Inventory at Ethique Ethique produces a range of bodycare products. The relevant inventory information for one of the shampoos is provided below.

Problem #1 Managing Inventory at Ethique Ethique

Problem #1 Managing Inventory at Ethique Ethique produces a range of bodycare products. The relevant inventory information for one of the shampoos is provided below. Demand =50 units/week Std Dev of weekly demand =12 units Carrying charge rate =10% Lead time =4 weeks Order cost =$30 /order Unit cost =$10 Number of weeks per year =52 To Do: a) Calculate the EOQ [2 Marks] b) Calculate the time interval between reviews, T [2 Marks] c) Calculate the replenishment level, M, assuming no safety stock [2 Marks] d) If the Ethique manager wants to ensure a 95% probability of being in stock, how much safety stock should be planned? What would the new replenishment level be? [2 Marks] e) Describe the ordering logic for the manager. [2 Marks]

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