A) What is the safety stock quantity that will be held using a periodic system of inventory management? B) What is the target inventory level (T), assuming a periodic review inventory management system is used? C) What is the average inventory level?
KungFu Panda is a popular Chinese takeout in a large metropolitan city. The restaurant is famous for its noodle soup, for which special noodles are sourced from a small local authentic Chinese noodle production plant. The inventory of raw materials in the restaurant is managed by the chef’s daughter, Ms. Huan, who balances college studies with running the stock room. She only has time once a week to check inventory levels and place orders for items running low. Unfortunately, Chegg.com is not very helpful in running a real operation.
To keep her chef parents happy, she wants to ensure a 98% cycle service level. Data on daily usage (demand) of noodle boxes for the past 30 days, and lead time of the last 20 orders placed with the supplier is available in the Excel file. You may assume that this data is representative and can be used to estimate demand and lead time.
The cost of a box of noodles for KungFu Panda restaurant is 2$. The holding cost is 25% of an items value. See below for remaining data attached
A) What is the safety stock quantity that will be held using a periodic system of inventory management?
B) What is the target inventory level (T), assuming a periodic review inventory management system is used?
C) What is the average inventory level?
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