Demand (D) = 2,000 units/year, normally distributed Standard deviation of weekly demand = 3 units Ordering cost = $ 50 /order Holding cost (H) = $ 6.00/unit per year Desired service level = 90 % Lead time (L) = 5 weeks If the company uses a periodic review system, what should the review period (P) be (in weeks)? Pick the closest ansv

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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A golf specialty wholesaler operates 50 weeks per year. Management is trying to determine an inventory policy for its 1-irons, which
have the following characteristics:
Demand (D) = 2,000 units/year, normally distributed
Standard deviation of weekly demand = 3 units
Ordering cost = $ 50 /order
Holding cost (H) = $ 6.00/unit per year
Desired service level = 90 %
Lead time (L) = 5 weeks
If the company uses a periodic review system, what should the review period (P) be (in weeks)? Pick the closest answer.
Transcribed Image Text:A golf specialty wholesaler operates 50 weeks per year. Management is trying to determine an inventory policy for its 1-irons, which have the following characteristics: Demand (D) = 2,000 units/year, normally distributed Standard deviation of weekly demand = 3 units Ordering cost = $ 50 /order Holding cost (H) = $ 6.00/unit per year Desired service level = 90 % Lead time (L) = 5 weeks If the company uses a periodic review system, what should the review period (P) be (in weeks)? Pick the closest answer.
If the company uses a 2-week ordering period (P=2 weeks), how much safety stock should the company carry? Pick the closest answer.
O 5.5
6.5
7.5
8.5
O 9.5
O 10.5
Transcribed Image Text:If the company uses a 2-week ordering period (P=2 weeks), how much safety stock should the company carry? Pick the closest answer. O 5.5 6.5 7.5 8.5 O 9.5 O 10.5
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