Sam

$$

s Cat Hotel operates

$52$

$$weeks per year,

$7$

$$days per week, and uses a continuous

review inventory system. It purchases Kitty Litter for $

$16\mathrm{.}38$

$$per bag. The following

information is available about these bags.

Demand

$125$

$$bags

$/$

week

Order Cost $

$75\mathrm{.}00$

$$per order

Annual Holding Cost

$27$

$\%$

$$of cost

Desired Cycle

$-$

Service Level

$80$

$\%$

Lead Time

$3$

$$weeks

$(21$

$$working days

$)$

Standard Deviation of weekly demand

$21$

$$bags

Current on Hand Inventory

$450$

$$bags

Open Orders or Backorders

A$.$ What is the Economic Order Quantity $($EOQ$)$ for Kitty Litter?