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 funds business to be booming but she often stocks out of key

image text in transcribed
Brenda opened a pool and spa store in a lively shopping mall and funds 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 (foed-order quantity) and/or periodic review (fixed-order penod) 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 vender 160 miles away. Brendas 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=545/order Lead-time = 2 weeks Item cost = $90/box Sed deviation in weekly demand 4 Inventory-holding cost = 20 percent year Service level 94 percent a. What is the economic order quantity (EOQ) rounded to the next highest number? Round to the nearest whole number bottles b. What is the reorder point for SA with safety stock? Use Appendix A to determine 2-value. Round zvabit to two decimal places. Do not found intermediate calculation Round your answer to one decimal place. bottles c. What is the average number of orders per year using the EOQ? Do not found 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 with AI-Powered 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

Financial and Managerial Accounting

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

12th edition

978-1133952428, 1285078578, 1133952429, 978-1285078571

Students also viewed these Accounting questions