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Brenda opened a pool and spa store in a lively shopping mall and finds business to be booming but she often stocks out of
Brenda opened a pool and spa store in a lively shopping mall and finds business to be booming but she often stocks out of key items customers want. Super Algaecide (SA) is a high margin SKU, but it stocks out frequently. Brenda orders boxes from a vendor 160 miles away. Brenda is busy running the store and seldom has time to review store inventory status and order the right quantity at the right time. She collected the following data: Demand = 12 boxes per week Order cost $30/order Item cost $60/box Inventory-holding cost = 15 percent per year Store open = 48 weeks/year Lead-time = 5 weeks Std. deviation in weekly demand = 8 Service level = 96 percent Brenda wants to consider setting up a fixed-period inventory system for the 28-ounce bottle of Super Algaecide (SA) SKU. At the beginning of the current week, D. J. Kole, the materials manager, checked the inventory level and found 60 units on-hand. There were no scheduled receipts and 45 units were on backorder. a. What is the review period (T)? Do not round intermediate calculations. Round your answer up to the nearest whole number. weeks b. What is stock replenishment level with safety stock (M)? Do not round intermediate calculations. Round your answer to the nearest whole number. bottles c. How many units should be ordered? Do not round intermediate calculations. Round your answer to the nearest whole number. orders/year
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