Your firm uses a continuous review system and operates

52

weeks per year. One of the SKUs has the following characteristics. Refer to the standard normal table

LOADING...

for z-values.

Demand

(D) =

18,600

units/year

Ordering

cost (S) =

$30.00/order

Holding

cost (H) =

$4.25/unit/year

Lead

time (L) =

1

week(s)

Cycle-service

level =

96%

Demand

is normally distributed, with a standard deviation of weekly demand of

93

units.

Current

on-hand inventory is

1,040

units, with no scheduled receipts and no backorders.

Part 2

The item's economic order quantity is

enter your response here

units. (Enter your response rounded to the nearest whole number.)