Problem 11-15

Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year.

Item cost	$	7.00		Standard deviation of weekly demand	20	per week
Order cost	$	261.00		Lead time	3	weeks
Annual holding cost (%)		34	% of item cost	Service probability	99	%
Annual demand		27,800
Average demand		556	per week

a. Determine the order quantity and reorder point. (Use Excel's NORMSINV() function to find the correct critical value for the given -level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.)

Optimal order quantity		units
Reorder point		units

b. Determine the annual holding and order costs. (Round your answers to 2 decimal places.)

Holding cost	$
Ordering cost	$

c. Assume a price break of $55 per order was offered for purchase quantities of 2,100 or more units per order. If you took advantage of this price break, how much would you save annually? (Round your answer to 2 decimal places.)

Annual savings

$

ALL I NEED HELP WITH IS C.

Question 2 of 5) Save & Sub Time remaining: 3:36:51 2. 2.00 points Problem 11-15 Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. thom cost Onder cost Annual holding cost (%) Annual demand Average demand $ 7.00 $ 261.00 34 Sofitem con 556 per week Standard deviation of weekly demand Lead time Service probability 20 per week 99 % 27.800 a. Determine the order quantity and reorder point. (Use Excel's NORMSINV() function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.) 2460 Optimal order quantity Reorder point 1749 its b. Determine the annual holding and order costs. (Round your answers to 2 decimal places.) Holding cost Ordering cost 2930 C. Assume a price break of $55 per order was offered for purchase quantities of 2,100 or more units per order. If you took advantage of this price break, how much would you save annually? (Round your answer to 2 decimal places.) Annual savings 550 References Book & Resources Worksheet Difficulty Intermediate Problem 11.15 Learning Objective: 11-02 Analyze how different inventory control systems Check my work 2020 All rights reserved Question 2 of 5) Save & Sub Time remaining: 3:36:51 2. 2.00 points Problem 11-15 Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. thom cost Onder cost Annual holding cost (%) Annual demand Average demand $ 7.00 $ 261.00 34 Sofitem con 556 per week Standard deviation of weekly demand Lead time Service probability 20 per week 99 % 27.800 a. Determine the order quantity and reorder point. (Use Excel's NORMSINV() function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.) 2460 Optimal order quantity Reorder point 1749 its b. Determine the annual holding and order costs. (Round your answers to 2 decimal places.) Holding cost Ordering cost 2930 C. Assume a price break of $55 per order was offered for purchase quantities of 2,100 or more units per order. If you took advantage of this price break, how much would you save annually? (Round your answer to 2 decimal places.) Annual savings 550 References Book & Resources Worksheet Difficulty Intermediate Problem 11.15 Learning Objective: 11-02 Analyze how different inventory control systems Check my work 2020 All rights reserved