Russ Krests apple store utilizes a continuous review system. Current on had inventory is 295 bags of apples, with no open orders or backorders. Russ buys apples year round, 52 weeks a year, 5 days a week. Russ buys apples for $10.20 a bag. The following information is available about these bags of apples:

Demand = 90 bags/week

Order cost = $52/order

Annual Holding cost = 26 percent of the cost of a bag

Desired cycle-service level = 80 percent

Lead time = 2 weeks (10 working days)

Standard deviation of weekly demand = 14 bags

Go to two decimal points in all calculations.

3A. What is the annual holding cost (H) per unit expressed in dollars? __________________ answer

(two decimal points) 4 points

3B. What is the annual demand (D) of bags of apples? ___________________ answer

(two decimal points) 4 points

Hint: asking for annual demand, not weekly demand

3C. What is order cost (S) expressed in dollars? (per order) ________----------------------------ans.

(two decimal points) 1 points

(Hint: Not a trick question)

3D. What is the EOQ? ( I want a number here, not a noun) ________________ answer (two decimal points) 4 points

3E. What would the average TBO (time between orders) (in weeks)? _________________ answer (weeks) (two decimal points) 4 points

3F. What is the safety stock? (I want a number here) ___________________ answer

(two decimal points) 4 points

Hint: Need to find Z from Z table first.

Z table is in on next page

Find Z from desired service level and from Z table.

Z is not the desired service level.

3G. What should R (re-order point) be? ________________ answer (two decimal points) 4 points