Jake, Inc. begins a review of ordering policies for its continuous review system by checking the...
Jake, Inc. begins a review of ordering policies for its continuous review system by checking the current policies for a sample of its A items.
Following are the characteristics of one item:
Demand (D) = 94 units/week (assume 52 weeks per year)
Ordering and setup cost (S) = $720/order
Holding cost (H) = $23/unit/year
Lead time (L) =3 weeks
Standard deviation of weekly demand =30 units
Cycle-service level =82 percent
Develop the best policies for a periodic-review system.
a. What value of P gives the same approximate number of orders per year as the EOQ? Round to the nearest week.
b. What safety stock and target inventory levels provide a 90-percent cycle-service level?
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Jake, Inc. begins a review of ordering policies for its
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