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The purchase lead time is approximately 1 5 days. For simplicity, suppose that there are only two types of Energizer batteries in the warehouse: Item
The purchase lead time is approximately days. For simplicity, suppose that there are only two types of Energizer batteries in the warehouse: Item #CAV Lantern battery with annual demand of units and price of $ each, and Item #CAV Lantern battery with annual demand of units and price of $ each. a Suppose that the fixed cost of a purchase order for one SKU is $ and the variable cost of each additional line item SKU is $ Also suppose that holding cost rate is percent of unit cost per year. Determine the optimal order interval. B The forecast demand for Item #CA is units per week for the next few weeks and the standard deviation of demand is estimated to be units per week. Currently there are units on hand in the warehouse and none are on order. The service level for this SKU is desired to be percent. Calculate the Imax order up to level for this battery, and determine the quantity to order.
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