Question
Your company imports decorative planters from Italy. Weekly demand is 1,500 units on average, with a standard deviation of 800. Each planter costs you $10,
Your company imports decorative planters from Italy. Weekly demand is 1,500 units on average, with a standard deviation of 800. Each planter costs you $10, and the holding cost per year is 25%. You are using a distribution center in Arizona, and fixed transportation costs from Italy is $10,000 per order. Consider a 52-week/year operations.
Consider a periodic review policy with base stock level of 9,000 units. If the current inventory position is 7,000 units when you are about to order (similar to the idea of reorder point under continuous review), what should be your order quantity?
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