A Store Has Collected the Following Information on One of Its

question 79

Essay

A store has collected the following information on one of its products:
Demand = 4,500 units/year
Standard deviation of weekly demand = 12 units
Ordering costs = $40/order
Holding costs = $3/unit/year
Cycle-service level = 90% (z for 90% = 1.28)
Lead-time = 2 weeks
Number of weeks per year = 52 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 300 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:

Product Feature

A characteristic or attribute of a product that is intended to enhance its desirability or functionality.

Social Judgement Theory

A psychological theory proposing that people compare incoming information against their existing attitudes on an issue, which influences the acceptance, rejection, or neutrality towards the message.

Designated Driver Systems

Designated driver systems are safety initiatives where individuals choose a non-drinking driver to transport them home safely, aiming to reduce alcohol-related accidents.

Commercial

A commercial is a paid advertisement or promotional message broadcast on television, radio, or online platforms, aimed at informing or persuading consumers about products, services, or brands.