Question: X=1200 Question 3 (2 points) An inventory ordering system for a new production item Pl is to be set up. Every four weeks (28 days)

X=1200

X=1200 Question 3 (2 points) An inventory

Question 3 (2 points) An inventory ordering system for a new production item Pl is to be set up. Every four weeks (28 days) inventory is counted and a new order is placed. The daily usage rate for Pl is normally distributed. The manager has gathered the following information about the item: Item P1 Average daily demand 100 units Standard deviation 3 units per day LGT5171/ Contemporary Issues in Operations Management Page 4 of 7 2020/21, Sem 2 Unit cost $10 Annual holding cost 20% of unit cost Ordering cost per order $70 Lead time 1 week Acceptable stockout risk 2% Q3.1 Compute the order quantity for P1 if 1000 units are on hand at the time the order is placed. (1 point) Q3.2 What is the order quantity for P1 if X units are on hand at the time the order is placed? (Replace X in the question with its value in the table of page 2.) (1 point)

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