Question
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 = 20 units
Order cost = $72/order
Annual holding cost = $5/unit
Desired cycle-service level = 90%
Lead time = 4 weeks
Current on-hand inventory is 300 units, with no open orders and a backorder of 30 units.
Currently, the company uses a continuous review (s, S) policy.
a.What is the EOQ?
b.What should be the safety stock?What should the reorder point be?
c. An inventory withdrawal of 20 pairs was just made.Is it time to reorder?
d. Please describe briefly the inventory control policy based on your calculation including the order quantity, when to order and how often to order.
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