Question: Smylie & Son uses a fixed - period system t o manage its inventory o f hand - rolled cigars. One model, the e l

Smylie & Son uses a fixed-period system to manage its inventory of hand-rolled cigars. One model, the el diablo, enjoys robust demand at480 boxes per week (20 cigars per box) with a standard deviation of120. Cigars must be stored in a carefully controlled climate, so storage costs are $5cigar per year. Smylie and Sons supplier is located onan island south of Miami, Florida, and ordering is complicated and thus expensive, at $1,500an order. Even at that price, it takes an average of six weeks to receive a shipment. El diablo is popular even at the exorbitant price Smylie & Son charges, so the company is loath to run out of stock and has set its service level at a respectable 99 percent. What should the review period be?
a.
8 weeks
b.
7 weeks
c.
6 weeks
d.
9 weeks

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