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A bicycle store uses the (, ) policy to replenish its inventory for a particular popular brand of bicycle. Whenever their inventory drops below 50
A bicycle store uses the (, ) policy to replenish its inventory for a particular popular brand of bicycle. Whenever their inventory drops below 50 units, they make an order to increase the inventory level to 200 units. The replenishment lead time is fixed at 2 months. All the demand that is not met is lost. In the following table the exact demand of the year 2020 is given. Month Demand Month Demand Month Demand January 25 May 31 September 17 February 18 June 35 October 15 March 20 July 27 November 16 April 28 August 21 December 18 b.1) Assuming that the initial inventory at the beginning of 2020 is 100 units. When and how many units should the store order? [20 marks] b.2) What is the number of lost sales? [5 marks]
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