Your firm uses a periodic review system for all SKUs classified, using ABC analysis, as B...

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Your firm uses a periodic review system for all SKUs classified, using ABC analysis, as B or C items. Further, it uses a continuous review system for all SKUS classified as A items. The demand for a specific SKU, currently classified as an A item, has been dropping. You have been asked to evaluate the impact of moving the item from continuous review to periodic review. Assume your firm operates 52 weeks per year, the item's current characteristics are: Demand (D) 14,040 units/year Ordering cost (S)-$135.00/order Holding cost (H) $2.50/unit/year Lead time (L) 6 weeks Cycle-service level 99% Demand is normally distributed, with a standard deviation of weekly demand of 60 units. a. Calculate the item's EOQ EOQ 1231 units. (Enter your response rounded to the nearest whole number.) b. Use the EOQ to define the parameters of an appropriate continuous review and periodic review system for this item. Refer to the standard normal table when necessary. Under a continuous review system, order 1.231 units whenever the inventory level drops to 1,962 units. (Enter your responses rounded to the nearest whole number) Under a periodic review system, order up to units every weeks. (Enter your responses rounded to the nearest whole number) Your firm uses a periodic review system for all SKUs classified, using ABC analysis, as B or C items. Further, it uses a continuous review system for all SKUS classified as A items. The demand for a specific SKU, currently classified as an A item, has been dropping. You have been asked to evaluate the impact of moving the item from continuous review to periodic review. Assume your firm operates 52 weeks per year, the item's current characteristics are: Demand (D) 14,040 units/year Ordering cost (S)-$135.00/order Holding cost (H) $2.50/unit/year Lead time (L) 6 weeks Cycle-service level 99% Demand is normally distributed, with a standard deviation of weekly demand of 60 units. a. Calculate the item's EOQ EOQ 1231 units. (Enter your response rounded to the nearest whole number.) b. Use the EOQ to define the parameters of an appropriate continuous review and periodic review system for this item. Refer to the standard normal table when necessary. Under a continuous review system, order 1.231 units whenever the inventory level drops to 1,962 units. (Enter your responses rounded to the nearest whole number) Under a periodic review system, order up to units every weeks. (Enter your responses rounded to the nearest whole number)