Question: Question 4 Abdullah's hotel operates 52 weeks per year 7 days per week and uses a continuous review inventory system. It purchases bags of rice

Question 4 Abdullah's hotel operates 52 weeks per year 7 days per week and uses a continuous review inventory system. It purchases bags of rice at $10 per bag. The following information is available about these bags: Demand (D) - 420 bags per week Ordering or Setup Cost (S) = $50 per order Annual Holding Cost (H) = 25% Lead Time (L) = 4 weeks (28 working days) Standard Deviation of Weekly Demand = 20 bags Current on-hand inventory is 500 bags, with no open orders or backorders. a) What is the EOQ? What would be the average time between orders (in weeks)? b) What should be? c) An inventory withdrawal of 20 bags was just made. Is it time to reorder? d) The store currently uses a lot size of 500 bags. What is the annual holding and ordering cost of this policy? Without calculating the EOQ, how can you conclude from these two costs that the current lot size is too large? e) What would be annual cost saved by shifting from 500 bags to EO

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