A Store Has Collected the Following Information on One of Its

question 107

Essay

A store has collected the following information on one of its products:
Demand = 10,000 units/year
Standard deviation of weekly demand = 25 units
Ordering costs = $30/order
Holding costs = $4/unit/year
Cycle-service level = 95% (z for 95% = 1.65)
Lead-time = 2 weeks
Number of weeks per year = 50 weeks
a.If a firm uses the continuous review system to control the inventory,what would be the order quantity and reorder point?
b.The firm decided to change to the periodic review system to control the item's inventory.For the most recent review,an inventory clerk checked the inventory of this item and found 200 units.There were no scheduled receipts or backorders at the time.How many units should be ordered? (HINT: Use the EOQ model to derive P,the time between reviews. )

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Definitions:

Energy Of The Sun

The radiant energy produced by the Sun, a result of nuclear fusion processes, providing light and heat essential for life on Earth.

Poles

The two opposite ends of the Earth's axis, known as the North Pole and South Pole, characterized by extreme weather conditions and unique ecosystems.

Equator

An imaginary line around the Earth equidistant from the North and South Poles, dividing the Earth into the Northern and Southern Hemispheres.

Heat And Dryness

Environmental conditions characterized by elevated temperatures and low humidity, which can stress living organisms and ecosystems.