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. 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 = 7 boxes per week Store open = 48 weeks/year
Order cost = $60/order Lead-time = 4 weeks
Item cost = $120/box Std. deviation in weekly demand = 6
Inventory-holding cost = 10 percent per year Service level = 91 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 65 units on-hand. There were no scheduled receipts and 25 units were on backorder.

What is the review period (T)? Do not round intermediate calculations. Round your answer up to the nearest whole number.

weeks

What is stock replenishment level with safety stock (M)? Do not round intermediate calculations. Round your answer to the nearest whole number.

bottles

How many units should be ordered? Do not round intermediate calculations. Round your answer to the nearest whole number.

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

Legal Environment Of Business Online Commerce Ethics And Global Issues

Authors: Henry R. Cheeseman

8th Edition

013397331X, 978-0133973310

More Books

Students also viewed these Law questions