Chrissy The Hissy Cat Hotel

Chrissy The Hissy Cat Hotel operates 52 weeks per year, 7 days per week, and uses a continuous review inventory system. It purchases cat food for $18.24 per bag. The following information is available about these bags:

Demand	145 bags/week
Order Cost	$85.00 per order
Annual Holding Cost	26% of cost
Desired Cycle-Service Level	83%
Lead Time	3 weeks (21 working days)
Standard Deviation of weekly demand	22 bags
Current on Hand Inventory	475 bags
Open Orders or Backorders	0

SHOW YOUR CALCULATIONS

1. What is the Economic Order Quantity (EOQ) for cat food?
2. What would be the average time between orders (in weeks)?
3. What would the Re-order Point (R)) be?
4. An inventory withdrawal of 70 bags was just made... Is it time to re-order?
5. The store currently uses a lot size of 600 bags (Q = 600). What would be the annual cost saved by shifting from the 600-bag lot size to the EOQ?