Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Under the ordering policy currently in use , what is the average cycle stock inventory level and the average annual carrying cost ? PROVIDE

image text in transcribed\

Under the ordering policy currently in use, what is the average cycle stock inventory level and the average annual carrying cost?

PROVIDE YOUR ANSWER BELOW, AND CLEARLY LABEL YOUR ANSWERS TO BOTH PARTS OF THE QUESTION.

DONT USE AI TO SOLVE

Daily demand for an an inventory item is normally distributed with average value of 31 units per day The standard deviation of daily demand is 4 The item is used 365 days per year We buy the item for $50 per unit Each time we order, we incur fixed ordering costs of $175 per order Our annual carrying cost rate is 25% When we order replenishment inventory, the order lead time is 4 days The ordering policy currently being used is: Whenever inventory position falls to R=140 units, an order is placed for Q=840 units

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_2

Step: 3

blur-text-image_3

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

Food Supply Chain Management And Logistics

Authors: Samir Dani

2nd Edition

1398600121, 978-1398600126

More Books

Students also viewed these General Management questions