Solve part h!

AK's Cat 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 following information is available about these bags. Demand = 90 bags/week Order cost = $ 54/order Annual holding cost = 27 percent of order cost Desired cycle-service level = 80% Lead time - 3 weeks (18 working days) Standard deviation of weekly demand = 15 bags Current on-hand inventory is 320 bags, with no open orders or backorders. Answer the following questions a. What is the EOQ? What would be the average time between orders (in weeks)? b. What should be? c An inventory withdrawal of 10 bags was just made, Is it time to reorder? d. The store currently uses a lot size of 500 bags (ie.Q+500). What is the annual holding cost of this policy? Annual ordering cost? Without calculating the EOQ, how can you conclude from these two calculations that the current lot size is too large? e. What would be the annual cost saved by shifting from the 500 bag lot size to the EOQ? f. 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? 8. Suppose that actual demand is 60 bags but that ordering costs are cut to only $6 by using the Internet to automate order placing. However, the buyer does not tell anyone, and the EOQ is not adjusted to reflect this reduction in S. How much higher will total costs be, compared to what they could be if the EOQ were adjusted? h. Suppose that AK's Cat Hotel uses a P system instead of a Q system. The average daily demand is d=90/6=15 bags and the standard deviation of daily demand is 0=oweek/v6 = (15/16 = 6.124 bags 1. What P (in working days) and T should be used to approximate the cost trade-offs of the EOQ? ll How much more safety stock is needed than with a Q system? It is time for the periodic review. How much kitty litter should be ordered