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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
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.Demand D unitsweek Assume weeks per year Ordering or setup cost S $orderHolding cost H $unityearLead time L weeksStandard deviation of weekly demand unitsCycleservice level percenta. What is the EOO for this item?b What is the desired safety stock?c What is the reorder point?What are the cost implications if the current policy for thisitem is Q and R
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