A company begins a review of ordering policies for its continuous review system by checking the...

Transcribed Image Text:

A company begins a review of ordering policies for its continuous review system by checking the current policies for a sample of SKUs. Following are the characteristics of one item. Refer to the standard normal table for z-values. > Demand (D) = 105 units/week (Assume 48 weeks per year) > Ordering and setup cost (S) = $40/order > Holding cost (H) = $12.50/unit/year >Lead time (L) = 1 weeks > Standard deviation of weekly demand = 20 units > Cycle-service level = 98 percent a. What is the EOQ for this item? units. (Enter your response rounded to the nearest whole number.) b. What is the desired safety stock? c. What is the reorder point? units. (Enter your response rounded to the nearest whole number.) units. (Enter your response rounded to the nearest whole number.) d. What are the cost implications if the current policy for this item is Q = 500 and R = 125? The annual ordering cost is $ (enter your response rounded to two decimal places) and the annual holding cost is $ (enter your response rounded to two decimal places). A company begins a review of ordering policies for its continuous review system by checking the current policies for a sample of SKUs. Following are the characteristics of one item. Refer to the standard normal table for z-values. > Demand (D) = 105 units/week (Assume 48 weeks per year) > Ordering and setup cost (S) = $40/order > Holding cost (H) = $12.50/unit/year >Lead time (L) = 1 weeks > Standard deviation of weekly demand = 20 units > Cycle-service level = 98 percent a. What is the EOQ for this item? units. (Enter your response rounded to the nearest whole number.) b. What is the desired safety stock? c. What is the reorder point? units. (Enter your response rounded to the nearest whole number.) units. (Enter your response rounded to the nearest whole number.) d. What are the cost implications if the current policy for this item is Q = 500 and R = 125? The annual ordering cost is $ (enter your response rounded to two decimal places) and the annual holding cost is $ (enter your response rounded to two decimal places).