3. Inventory Planning - Continuous Review Policy A retailer guarantees a 95% service level for all stock items. Stock is replenished using a continuous review policy from a single wholesaler who has fixed lead time of 4 weeks. The retail price for the particular item is $200 and the annual holding cost per unit is estimated as 20% of the retail price. Reordering costs involve overhead for administrative work as well as shipment costs which are estimated as $400 per order. Demand is normally distributed with a mean of 100 units a week and a standard deviation of 10 units a) What is the Re-Order Point (ROP)? What percentage of the ROP is due to safety stock? b) What is the EOQ? c) What is the Order-Upto-Level (OUL)? d) Describe the inventory control policy (continuous review policy) that the retailer will need to use? e) What is the average inventory? What is the annual inventory holding cost? f) Through a lean implementation the retailer would like to decrease the annual inventory holding cost by half. What possible changes can you do to achieve this goal? 3. Inventory Planning - Continuous Review Policy A retailer guarantees a 95% service level for all stock items. Stock is replenished using a continuous review policy from a single wholesaler who has fixed lead time of 4 weeks. The retail price for the particular item is $200 and the annual holding cost per unit is estimated as 20% of the retail price. Reordering costs involve overhead for administrative work as well as shipment costs which are estimated as $400 per order. Demand is normally distributed with a mean of 100 units a week and a standard deviation of 10 units a) What is the Re-Order Point (ROP)? What percentage of the ROP is due to safety stock? b) What is the EOQ? c) What is the Order-Upto-Level (OUL)? d) Describe the inventory control policy (continuous review policy) that the retailer will need to use? e) What is the average inventory? What is the annual inventory holding cost? f) Through a lean implementation the retailer would like to decrease the annual inventory holding cost by half. What possible changes can you do to achieve this goal