Question: Weekly demand for DVDs at a retailer is normally distributed with a mean of 1067 boxes and a standard deviation of 285. Assume the following
Weekly demand for DVDs at a retailer is normally distributed with a mean of 1067 boxes and a standard deviation of 285. Assume the following data: There are 50 working weeks in a year. Lead time for delivery of an order is 4 weeks. The retailer takes ownership of the product only when the product reaches the store (i.e., the retailer is not responsible for pipeline inventory). Fixed cost (ordering and transportation) per order is $104. Each box of DVDs costs $4. Percent carrying cost is 22% of the unit value. The retailer currently orders 11341 DVDs when stock on hand reaches 5074.
A) What is the annual inventory holding cost under the current policy? Please keep 4 decimals.
b)What is the z-score under the current policy? Please round to 4 decimal places.
c)What is the current service level? Give your answer in percentage points and round to a whole number.
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