Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

P35. The A manager must set up inventory ordering systems for two new production items, P34 and P34 can be ordered at any time, but

image text in transcribed

P35. The A manager must set up inventory ordering systems for two new production items, P34 and P34 can be ordered at any time, but P35 can be ordered only once every four weeks. The company operates 50 weeks a year, and the weekly usage rates for both items are normally distributed. manager has gathered the following information about the items. Item P34 Item P35 Average weekly demand 60 units 70 units Standard deviation 4 units per week 5 units per week Unit cost $15 $20 Annual holding cost 30% 30% Ordering cost $70 $30 Lead time 2 weeks 2 weeks Acceptable stockout risk 2.5% 2.5% a. When should the manager reorder each item? b. Compute the order quantity for P34. c. Compute the order quantity for P35 if 110 units are on hand at the time the order is placed

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

Auditing ISO Management System

Authors: Dr. RAMESH R LAKHE, Dr. RAKESH L. SHRIVASTAVA, M M NAVEED, KRANTI P DHARKAR, Dr. C M SEDANI

1st Edition

1702203913, 978-1702203913

More Books

Students also viewed these Accounting questions

Question

Employ effective vocal cues Employ effective visual cues

Answered: 1 week ago