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QUESTION 6 As the Operation manager at Giant Wholesale, you want to improve the inventory for the finished goods. The company is always having a shortage problem in product A. To analyse this product A inventory, you have collected the data as below: i)Average demand per day = 80 units ii)Working days per year = 300 days iii)Ordering cost = RM40 per order iv)Annual carrying (holding) cost rate = 10% of item cost v)Cost of product A per unit = RM150 vi)Lead time = 5 days vii) Standard deviation of daily demand= 5 units viii) Customer service level = 95% Based on the data given above, answer the following questions: a) Compute EOQ. b) Compute the annual total inventory cost. c) Based on a continuous review system (Q System), determine the optimal order quantity Q, and reorder point (R). d) Based on the periodic review system (P System), determine the period review interval (P) and target inventory level (T).

QUESTION 6 As the Operation manager at Giant Wholesale, you want to improve the inventory for the finished goods. The company is always having a shortage problem in product A. To analyse this product A inventory, you have collected the data as below: i)Average demand per day = 80 units ii)Working days per year = 300 days iii)Ordering cost = RM40 per order iv)Annual carrying (holding) cost rate = 10% of item cost v)Cost of product A per unit = RM150 vi)Lead time = 5 days vii) Standard deviation of daily demand= 5 units viii) Customer service level = 95% Based on the data given above, answer the following questions: a) Compute EOQ. b) Compute the annual total inventory cost. c) Based on a continuous review system (Q System), determine the optimal order quantity Q, and reorder point (R). d) Based on the periodic review system (P System), determine the period review interval (P) and target inventory level (T).

Algebra for College Students
Algebra for College Students
10th Edition
ISBN:9781285195780
Author:Jerome E. Kaufmann, Karen L. Schwitters
Publisher:Jerome E. Kaufmann, Karen L. Schwitters
Chapter10: Exponential And Logarithmic Functions
Section10.2: Applications Of Exponential Functions
Problem 47PS
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QUESTION 6 As the Operation manager at Giant Wholesale, you want to improve the inventory for the finished goods. The company is always having a shortage problem in product A. To analyse this product A inventory, you have collected the data as below: i)Average demand per day = 80 units ii)Working days per year = 300 days iii)Ordering cost = RM40 per order iv)Annual carrying (holding) cost rate = 10% of item cost v)Cost of product A per unit = RM150 vi)Lead time = 5 days vii) Standard deviation of daily demand= 5 units viii) Customer service level = 95% Based on the data given above, answer the following questions: a) Compute EOQ. b) Compute the annual total inventory cost. c) Based on a continuous review system (Q System), determine the optimal order quantity Q, and reorder point (R). d) Based on the periodic review system (P System), determine the period review interval (P) and target inventory level (T).
Transcribed Image Text:QUESTION 6 As the Operation manager at Giant Wholesale, you want to improve the inventory for the finished goods. The company is always having a shortage problem in product A. To analyse this product A inventory, you have collected the data as below: i)Average demand per day = 80 units ii)Working days per year = 300 days iii)Ordering cost = RM40 per order iv)Annual carrying (holding) cost rate = 10% of item cost v)Cost of product A per unit = RM150 vi)Lead time = 5 days vii) Standard deviation of daily demand= 5 units viii) Customer service level = 95% Based on the data given above, answer the following questions: a) Compute EOQ. b) Compute the annual total inventory cost. c) Based on a continuous review system (Q System), determine the optimal order quantity Q, and reorder point (R). d) Based on the periodic review system (P System), determine the period review interval (P) and target inventory level (T).
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