Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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. She decides to experiment with inventory control methods, such as using a continuous review (fixed-order quantity) and/or periodic review (fixed-order period) system. The 28-ounce bottle of Super Algaecide (SA) is a high margin SKU, but it stocks out frequently. Ten SA bottles come in each box, and she 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 = 8 boxes per week Store open = 48 weeks/year
Order cost = $18/order Lead-time = 3 weeks
Item cost = $36/box Std. deviation in weekly demand = 7
Inventory-holding cost = 25 percent year Service level = 90 percent

What is the economic order quantity (EOQ) rounded to the next highest number? Round to the nearest whole number.

boxes

What is the reorder point for SA with safety stock? Use Appendix A to determine z-value. Round z-value to two decimal places. Do not round intermediate calculations. Round your answer to one decimal place.

boxes

What is the average number of orders per year using the EOQ? Do not round intermediate calculations. Round your answer to two decimal places.

orders/year

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managing Information Technology

Authors: Carol Brown, Daniel DeHayes, Jeffrey Hoffer, Wainright Marti

7th Edition

132146320, 978-0132146326

More Books

Students also viewed these General Management questions

Question

2. He stabbed me in the stomach she said.

Answered: 1 week ago