Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ollah ' s Organic Pet Shop sells about bags of free - range dog biscuits every year. The fixed ordering cost is $ , and

Ollah's Organic Pet Shop sells about bags of free-range dog biscuits every year. The fixed ordering cost is $, and the cost of holding a bag in inventory for a year is $.
LOADING... Click the icon to view the table of z values.
Part 2
a. What is the economic order quantity for the biscuits?
The EOQ is
enter your response here. (Enter your response rounded to the nearest whole number.)
Part 3
b. Suppose Ollah decides to order bags at a time. What would the total ordering and holding costs for the year be?(For this problem, don't consider safety stock when calculating holding costs.)
The total ordering and holding costs are $
enter your response here. (Enter your response rounded to the nearest dollar.)
Part 4
c. Average weekly demand for free-range dog biscuits is bags per week, with a standard deviation of bags. Ollah uses a continuous inventory review system to manage inventory of the biscuits. Ollah wants to set the reorder point high enough that there is only a % chance of running out before the next order comes in. Assuming that the lead time is a constant weeks, what should the reorder point be?
The reorder point is
2 bags. (Enter your response rounded to the nearest whole number.)
Part 5
d. Suppose Ollah decides to use a periodic review system to manage the free-range dog biscuits, with the vendor checking inventory levels every week. Under this scenario, what would the restocking level be, assuming the same demand and lead time characteristics listed in part c. and the same % service level? (Note that because the standard deviation of weekly demand is , basic statistics tells us the standard deviation of demand over weeks will be .)
The restocking level is
3 bags. (Enter your response rounded up to the nearest whole n

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

General Aviation Marketing And Management

Authors: Alexander T. Wells, Bruce D. Chadbourne

2nd Edition

1575241927, 978-1575241920

More Books

Students also viewed these General Management questions