Question: QUESTION 2: Your firm uses a continuous review system and operates 52 weeks per year. One of the SKUs has the following characteristics. Refer to
QUESTION 2: Your firm uses a continuous review system and operates 52 weeks per year. One of the SKUs has the following characteristics. Refer to the standard normal table for z-values. - Demand(D)=18,000 units/year - Ordering cost (S)=$35.00/ order - Holding cost (H)=$4.25/ unit/year - Lead time (L)=1 week(s) - Cycle-service level =90% - Demand is normally distributed, with a standard deviation of weekly demand of 90 units - Current on-hand inventory is 1,040 units, with no scheduled receipts and no back orders a. The item's economic order quantity is units. (Enter your response rounded to the nearest whole number) b. The average time between orders is weeks. (Enter your response rounded to two decimal places) c. To provide a 90 percent cycle-service level, the safety stock for this item is units (Enter your response rounded to the nearest whole number) d. To provide a 90 percent cycle-service level, the reorder point for this item is units (Enter your response rounded to the nearest whole number) e. For these policies, the annual cost of holding the cycle inventory is $ (Enter your number rounded to two decimal places)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
