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Helen Adu's company sells 4,900 high-end razors per year. Each razor costs her $8. It costs her $5 each time an order is placed,
Helen Adu's company sells 4,900 high-end razors per year. Each razor costs her $8. It costs her $5 each time an order is placed, and annual holding costs are 35 percent of the material costs. It takes four weeks for an order to arrive. Weekly demand is 98 razors with a weekly standard deviation of 50 razors. If you happened to do the math comparing annual demand to weekly demand, you'll see she is closed two weeks per year (the weekly demand is annual demand/50), but you should not do any additional adjustments in your calculations related to the two weeks she is closed. Helen would like to use a reorder point system with a 98 percent service level during the lead time. a. What is the economic quantity for Helen to order? Go to at least two decimals for your intermediate calculations (e.g., 0.18) and round your final answer to the nearest whole number. Economic order quantity razors b. At what inventory level should she place an order? Round the z score and intermediate calculations to 2 decimal places (e.g., 0.58) and your final answer to the nearest whole number. Inventory level razors
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