Question 4 (adapted from Chapter 9. problem 10). Question: The SCH Pet Products Store operates 6 days per week, 52 weeks per year, and uses a continuous review inventory system. It purchases kitty litter for $11.70 per bag. Other relevant information for the kitty litter is: demand = 90 bags per week, order cost = $54 per order, annual holding cost = 27% of cost, desired service level = 80 percent, lead time = 3 weeks or 18 working days, standard deviation of weekly demand = 15 bags per week. The current on-hand inventory is 320 bags. a. Calculate the optimal order quantity, EOQ, and the time between orders. b. Calculate the reorder point, R. c. 10 bags have just been sold. Is it time to reorder? d. The store currently uses an order size of 500 bags (i.e. Q = 500). What is the annual cycle inventory holding cost?, the annual ordering cost?, the safety stock holding cost? Without calculating the EOQ, how can you conclude from these two calculations that the current order size is not optimal? e. What would be the annual cost saved by shifting from the 500-bag order quantity to the EOQ? Answer: 0 - + 0 t4 19