Question
23. Suppose a clothing store sells jeans throughout the year. The average weekly sales of a particular brand are 192 pairs, with a standard
23. Suppose a clothing store sells jeans throughout the year. The average weekly sales of a particular brand are 192 pairs, with a standard deviation of 30 pairs. The supplier charges $40 per pair, and the ordering cost is $20. The annual holding cost is 25% of the jeans' value. The lead time for replenishing the jeans stock is constant at four weeks. Management desires a 98% service level. Please determine a) the optimal order quantity (EOQ), b) safety stock (SS), c) reorder point (ROP), and d) total cost using this information.
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To determine the optimal order quantity EOQ safety stock SS reorder point ROP and total cost we can use the Economic Order Quantity EOQ model Lets cal...Get Instant Access to Expert-Tailored Solutions
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College Mathematics for Business Economics Life Sciences and Social Sciences
Authors: Raymond A. Barnett, Michael R. Ziegler, Karl E. Byleen
12th edition
321614003, 978-0321614001
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