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A golf specialty wholesaler operates 50 weeks per year. Management is trying to determine an inventory control policy for its 1-irons, which have the following
A golf specialty wholesaler operates 50 weeks per year. Management is trying to determine an inventory control policy for its 1-irons, which have the following characteristics: Mean demand =2000 units/year Demand is normally distributed Standard deviation of weekly demand =3 units Order cost =$40/ order Annual holding cost =$5/ unit Desired cycle-service level =90% Lead time =4 weeks Current on-hand inventory is 240 units, with no open orders and a backorder of 20 units. Currently, the company uses a continuous review policy. a. What is the EOQ? b. What should be the safety stock? What should the reorder point be? c. Please describe how you would control the inventory of 1-irons to those who do not know inventory management
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