Sam's Cat Hotel operates 52 weeks per year, 7 days per week, and uses a continuous review inventory system. It purchases kitty litter for $10.50 per bag. The following information is available about these bags. Refer to the standard normal table for z-values. > Demand = 100 bags/week > Order cost = $56/order > Annual holding cost = 26 percent of cost > Desired cycle-service level = 99 percent > Lead time = 1 week(s) (7 working days) > Standard deviation of weekly demand = 10 bags > Current on-hand inventory is 310 bags, with no open orders or backorders. a. What is the EOQ? Sam's optimal order quantity is 462 bags. (Enter your response rounded to the nearest whole number.) What would be the average time between orders (in weeks)? The average time between orders is 4.62 weeks. (Enter your response rounded to one decimal place.) b. What should R be? The reorder point is 123 bags. (Enter your response rounded to the nearest whole number.) c. An inventory withdrawal of 10 bags was just made. Is it time to reorder? It is not time to reorder. d. The store currently uses a lot size of 480 bags (i.e., Q = 480). What is the annual holding cost of this policy? The annual holding cost is $ 606.6. (Enter your response rounded to two decimal places.)

Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
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Sam's Cat Hotel operates 52 weeks per year, 7 days per week, and uses a continuous review inventory system. It purchases kitty litter for $10.50 per bag. The following information is available about these bags. Refer to the standard normal table
for z-values.
> Demand = 100 bags/week
> Order cost = $56/order
> Annual holding cost = 26 percent of cost
> Desired cycle-service level = 99 percent
> Lead time = 1 week(s) (7 working days)
> Standard deviation of weekly demand = 10 bags
> Current on-hand inventory is 310 bags, with no open orders or backorders.
a. What is the EOQ?
Sam's optimal order quantity is 462 bags. (Enter your response rounded to the nearest whole number.)
What would be the average time between orders (in weeks)?
The average time between orders is 4.62 weeks. (Enter your response rounded to one decimal place.)
b. What should R be?
The reorder point is 123 bags. (Enter your response rounded to the nearest whole number.)
c. An inventory withdrawal of 10 bags was just made. Is it time to reorder?
It is not time to reorder.
d. The store currently uses a lot size of 480 bags (i.e., Q = 480). What is the annual holding cost of this policy?
The annual holding cost is $ 606.6. (Enter your response rounded to two decimal places.)
Transcribed Image Text:Sam's Cat Hotel operates 52 weeks per year, 7 days per week, and uses a continuous review inventory system. It purchases kitty litter for $10.50 per bag. The following information is available about these bags. Refer to the standard normal table for z-values. > Demand = 100 bags/week > Order cost = $56/order > Annual holding cost = 26 percent of cost > Desired cycle-service level = 99 percent > Lead time = 1 week(s) (7 working days) > Standard deviation of weekly demand = 10 bags > Current on-hand inventory is 310 bags, with no open orders or backorders. a. What is the EOQ? Sam's optimal order quantity is 462 bags. (Enter your response rounded to the nearest whole number.) What would be the average time between orders (in weeks)? The average time between orders is 4.62 weeks. (Enter your response rounded to one decimal place.) b. What should R be? The reorder point is 123 bags. (Enter your response rounded to the nearest whole number.) c. An inventory withdrawal of 10 bags was just made. Is it time to reorder? It is not time to reorder. d. The store currently uses a lot size of 480 bags (i.e., Q = 480). What is the annual holding cost of this policy? The annual holding cost is $ 606.6. (Enter your response rounded to two decimal places.)
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