Q2) The manager considers using a continuous review policy and he is planning for the reorder point and the order quantity in 2021 taking the inventory cost into account. Other relevant data is as follows: The standard deviation of the weekly demand is 3. Targeted cycle service level is 92% (no-stock out probability) Lead time is 4 weeks Each 22mm lens costs $1500 Annual holding cost is 20% of item cost Ordering cost is $400 per order a) Use the forecast of the most reliable method in 01 above to calculate the annual and weekly demand forecast for 2021? (5 points) b) What is the economic order quantity, EOQ? (5 points) c) What is the reorder point and safety stock? (10 points) d) What is the total annual cost of managing the inventory? (10 points) FORMULAE 1 year = 365 days; 1 year = 12 months; 1 month=4 weeks; 1 month=30 days; 1 week=7 days Inventory Formulas 2DS EOQ = * = ., Total Cost (TC) = SD/Q + H*(Q/2 +8s), ss ==VLO, H Q2) The manager considers using a continuous review policy and he is planning for the reorder point and the order quantity in 2021 taking the inventory cost into account. Other relevant data is as follows: The standard deviation of the weekly demand is 3. Targeted cycle service level is 92% (no-stock out probability) Lead time is 4 weeks Each 22mm lens costs $1500 Annual holding cost is 20% of item cost Ordering cost is $400 per order a) Use the forecast of the most reliable method in 01 above to calculate the annual and weekly demand forecast for 2021? (5 points) b) What is the economic order quantity, EOQ? (5 points) c) What is the reorder point and safety stock? (10 points) d) What is the total annual cost of managing the inventory? (10 points) FORMULAE 1 year = 365 days; 1 year = 12 months; 1 month=4 weeks; 1 month=30 days; 1 week=7 days Inventory Formulas 2DS EOQ = * = ., Total Cost (TC) = SD/Q + H*(Q/2 +8s), ss ==VLO, H