Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Your firm uses the continuous review system to manage a product, and operates 52 weeks a year. The product has the following characteristics: Ordering cost

image text in transcribed
Your firm uses the continuous review system to manage a product, and operates 52 weeks a year. The product has the following characteristics: Ordering cost = $40 per order Inventory-holding cost = $5 per unit per year Leadtime = 4 weeks . Weekly demand is normally distributed with mean 200 and standard deviation 12. You want to satisfy a 95% probability of not running out of stock in any one ordering cycle. (Note! 7.95=1.65) (a) What is the average demand during leadtime? units (b) What should be the safety stock? Answer with a whole number. units (c) What should be the reorder point? Answer with a whole number. units (d) What should be the order quantity? Answer with a whole number. a 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

Step: 3

blur-text-image

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

50 + Fun Financial Accounting Cases

Authors: Thomas E. McKee

1st Edition

1257824538, 978-1257824533

More Books

Students also viewed these Accounting questions