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Question 4 (16 marks) It is your responsibility as the new supervisor of the Sport's section of Alex Department Store to ensure that reorder quantities

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Question 4 (16 marks) It is your responsibility as the new supervisor of the Sport's section of Alex Department Store to ensure that reorder quantities for the various items have been correctly established. A perpetual inventory system is being used and the store currently sells a total of 2,400 spikes per quarter. Alex currently orders and receives new spikes with 5 days lead time for delivery. The cost of ordering and receiving these spikes from its supplier is $705.10 per order, regardless of how much or how little is ordered. The Department Store pays $125.02 for each spike and estimate its holding cost to be 11.75% of per year. Assuming the demand occurs 320 days per year. (a) If demand is expected to be constant, what is the recommended order quantity? (4 marks) (b) What are the estimated annual inventory holding and ordering costs associated with the spikes? (4 marks) (c) What would be the average number of spikes available for sale? (1 mark) (d) What would be the maximum inventory of spikes in stocks at the stores? (1 mark) (e) How many times for the year the store now needs to order spikes? (2 marks) (1) Since a perpetual inventory system is being used, at what inventory level should the reorder of new stocks be made? (2 marks) (g) What is the cycle time of this new inventory management policy? (2 marks)

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