Question: Sam s Pet Hotel operates 5 2 weeks per year, 6 days per week, and uses a continuous review inventory system.It purchases kitty litter for

Sams Pet Hotel operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system.It purchases kitty litter for $11.70 per bag. The follow-ing information is available about these bags. Demand =90 bags/week Order cost = $54/order Annual holding cost =27 percent of cost Desired cycle@service level =80 percent Lead time =3 weeks (18 working days) Standard deviation of weekly demand =15 bags Current on-hand inventory is 320 bags, with no openorders or backorders.
Consider again the kitty litter ordering policy for SamsPet Hotel in Problem 13.
a. Suppose that the weekly demand forecast of 90 bags is incorrect and actual demand averages only 60 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? Please show excel steps

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