Question
Petromax Enterprises uses a continuous review inventory control system for one of its SKUs. The following information is available on the item. The firm operates
Petromax Enterprises uses a continuous review inventory control system for one of its SKUs. The following information is available on the item. The firm operates 48 weeks in a year. Refer to the standard normal table..for z-values.
Demand =91,000 units/year
Ordering cost =$60/order
Holding cost =$3.50/unit/year
Average lead time =9 weeks
Standard deviation of weekly demand =175 units
Part 2
a. The economic order quantity for this item is ___units. (Enter your response rounded to the nearest whole number.)
Part 3
b. If Petromax wants to provide a 96% service level, the safety stock is _________units (enter your response rounded to the nearest whole number) and the reorder point is _________units (enter your response rounded to the nearest whole number).
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