Question: Your firm uses a continuous review system and operates 52 weeks per year. One of the SKUs has the following characteristics. Demand (D) = 20,000

Your firm uses a continuous review system and operates 52 weeks per year. One of the SKUs has the following characteristics.
Demand (D) = 20,000 units/year
Ordering cost (S) $40/order
Holding cost (H) = $2/unit/year
Lead time (L) =2 weeks Cycle-service level = 95%
Demand is normally distributed, with a standard deviation of weekly demand of 100 units. Current on-hand inventory is 1,040 units, with no scheduled receipts and no backorders.
a. Calculate the item’s EOQ. What is the average time, in weeks, between orders?
b. Find the safety stock and reorder point that provides a 95 percent cycle-service level.
c. For these policies, what are the annual costs of
(i) Holding the cycle Inventory
(ii) Placing orders?
d. A withdrawal of 15 units just occurred. Is it time to reorder? IF so, how much should be ordered?

Step by Step Solution

★★★★★

3.41 Rating (157 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Continuous review system a Economic order quantity Time ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

227-B-M-L-S-C-M (1030).docx

120 KBs Word File

Students Have Also Explored These Related Management Leadership Questions!

No Tell Motel operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases bath soap for $5.65 per box. The following information is available about these...

A population of scores is normally distributed with a standard deviation equal to 7. State whether the standard error will increase, decrease, or remain unchanged if the value of the population...

1. Does ATT have any tax loss carryforwards If so how much is it in 2013? 2. Has ATT recognized a Valuation Allowance If so how much is it in 2013 How does ATT explain its accounting policy on...

i need this asap please! Your firm uses a continuous review system and operates 52 weeks per year. One of the SKUs has the following characteristics. Refer to the standard normal table for z-values....

variability is reduced so that the standard deviation of weekly demand is 8 units instead of 16, what is the percent reduction (compared to that in part [b]) in the number of units maintained as...

2 Your firm uses a continuous review system and operates 52 weeks per year. One of the SKUs has the following characteristics. Demand (D) 30,000 units/year = Ordering cost (S) = $40/order Holding...

Problem 3: Your firm uses a continuous review system and operates 52 weeks per year. One of the items has the following characteristics: Demand () = 20,000 units/year Ordering cost () = $40/order...

Your firm uses a continuous review system and operates 5 2 weeks per year. One of the SKUs has the following characteristics. Demand 1 D 2 = 2 0 , 0 0 0 units > year Ordering cost 1 S 2 = $ 4 0 >...

Your firm uses a continuous review system and operates 52 weeks per year. One of the SKUs has the following characteristics. Demand 1D2 = 20,000 units>year Ordering cost 1S2 = $40>order Holding cost...

Problem 3: Your firm uses a continuous review system and operates 52 weeks per year. One of the items has the following characteristics: Demand () = 20,000 units/year Ordering cost () = $40/order...

Write a paper in which you need to Consider the narrative form of the film and how it is designed to affect viewers perceptions of the films characters and events. How do the fabula and the syuzhet...

The new accounting intern has completed the Statement of cash flow for the 3 months ended June 30, 2021 for your review Cash flow statement 3 months ended June 30, 2021 $ Cash flows from operating...

What should an employee look for when inspecting a ladder?

Which of the following can be used for buy-back of shares? (i) Free reserves (iii) Proceeds of fresh issue of shares (ii) Securities premium (iv) All of the above

Revisit the Helping Harvest problem in Problem 5. Assume that due to truck capacity constraints, not all stores can be visited in one route. Use the NN heuristic to develop two routes, one that picks...

Professor Gaffney needs to ship 800 pounds of laboratory equipment to a colleague across country. Due to limited departmental funds, Dr. Gaffney would like to minimize total shipment costs....

Which type of graph is typically not used for quantitative data? Select one: O Histogram Circle Graph O Bar graph O Dot plot Box plot

Problem 3 lnfocomp Systems Lab is a research and development [R3213] company that develops computer systems and software primarily for the medical industry. The lab has proposals from its own...

One year ago, your company purchased a machine used in manufacturing for $95,000. You have learned that a new machine is available that offers many advantages and you can purchase it for $140,000...