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$$ item, has been dropping. You have been asked to evaluate the impact of moving the item from continuous review to periodic review. Assume your firm operates weeks per$$ year; the$$ item's current characteristics$$ are:

Demand $($D$)$units$/$year

Ordering cost $($S$)$$$/$order

Holding cost $($H$)$$$/$unit$/$year

Lead time $($L$)$ weeks

$$Cycle$-$service level$\%$

Demand is normally$$ distributed, with a standard deviation of weekly demand of units.

Part $2$

a$.$ Calculate the$$ item's EOQ.

EOQ

$$

$1001$ units. $($Enter your response rounded to the nearest whole$$ number.$)$

Part $3$

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 tableLOADING... when necessary.

Under a continuous review$$ system, order

$$

enter your response here units whenever the inventory level drops to

$$

enter your response here units. $($Enter your responses rounded to the nearest whole$$ number.$)$