Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Sam's Pet Hotel operates 48 weeks per year, 7 days per week. It purchases kitty litter for $8.50 per bag. The following information is available
Sam's Pet Hotel operates 48 weeks per year, 7 days per week. It purchases kitty litter for $8.50 per bag. The following information is available about these bags: 7 > Demand = 80 bags/week > Order cost = $75/order > Annual holding cost = 22 percent of cost > Desired cycle-service level = 98 percent > Lead time = 1 week(s) (7 working days) > Standard deviation of weekly demand = 6 bags > Current on-hand inventory is 225 bags, with no open orders or backorders. Suppose that Sam's Pet Hotel uses a P system. The average daily demand, , is 11 bags (80/7), and the standard deviation of daily demand, Standard Deviation of Weekly Demand is 2.268 bags. Refer to the standard normal table for z-values. Days per week , a. What P (in working days) and T should be used to approximate the cost trade-offs of the EOQ? The time between orders, P, should be 50 days. (Enter your response rounded to the nearest whole number.) The target inventory, T, should be 667 bags. (Enter your response rounded to the nearest whole number.) b. How much more safety stock is needed than with a Q system? bags. (Enter your response rounded to the nearest whole number.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started