Practical Management Science
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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A company begins a review of ordering policies for its continuous review system by checking the current policies for a sample of SKUS Following are the characteristics of one tem
Demand (D)=85 units/week (Assume 52 weeks per year)
Ordening and setup cost (S) $75/order
Holding cost (H)-$16/und/year
Lead time (L) 5 week(s)
Standard deviation of weekly demand 22 units
Cycle-service lovel-90 percent
>EOQ-207 units
Using the above information, develop the best policies for a periodic review system Refer to the standard normal table for z-values
a. What value of P gives the same approximate number of orders per year as the EOQ? weeks (Enter your response rounded to the nearest whole number)
b. To provide a 98 percent cycle-service level, the average safety stock is
To provide a 98 percent cycle-service level, the target inventory level is
unts (Enter your response rounded to the nearest whole number)
units (Enter your response rounded to the nearest whole number)
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Transcribed Image Text:A company begins a review of ordering policies for its continuous review system by checking the current policies for a sample of SKUS Following are the characteristics of one tem Demand (D)=85 units/week (Assume 52 weeks per year) Ordening and setup cost (S) $75/order Holding cost (H)-$16/und/year Lead time (L) 5 week(s) Standard deviation of weekly demand 22 units Cycle-service lovel-90 percent >EOQ-207 units Using the above information, develop the best policies for a periodic review system Refer to the standard normal table for z-values a. What value of P gives the same approximate number of orders per year as the EOQ? weeks (Enter your response rounded to the nearest whole number) b. To provide a 98 percent cycle-service level, the average safety stock is To provide a 98 percent cycle-service level, the target inventory level is unts (Enter your response rounded to the nearest whole number) units (Enter your response rounded to the nearest whole number)
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