An Auto Parts Store (Open 350 Days Per Year) in a Major

question 42

Essay

An auto parts store (open 350 days per year) in a major metropolitan area reviews its inventory on a periodic basis using a computer system.It has recently been experiencing some problems with a particular part, a tune?up kit.The kit is bought from a U.S.manufacturer.The annual demand for these kits is 10,500.The cost to carry one kit in inventory for one year is $4.90, and the cost to place a replenishment order is $17 per order.Replenishment lead time is 4 days.
a.What should be the review period for these tune-up kits?
b.What is the optimal replenishment level without safety stock?
c.What is the optimal replenishment level with safety stock, assuming a 95 percent service level?

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Definitions:

Axial Skeleton

The central part of the skeleton, including the skull, spine, ribs, and sternum, that supports and protects the organs of the head, neck, and trunk.

Thoracic Cage

Also known as the rib cage, it encloses and protects the organs of the thorax, including the heart and lungs, while providing support for the shoulder girdle.

Vertebral Column

The backbone or spine, consisting of a series of vertebrae that protect the spinal cord and provide structural support.

Skull

The bony structure forming the head, supporting the structures of the face and protecting the brain.