Periodic review system p-system or periodic order quantity, Ask an Expert

Management Studies

Periodic Review System (P-System) or Periodic Order Quantity (POQ) or Fixed Interval Reorder System or Periodic Reorder System.

Wood County Hospital consumes 2,000 boxes of bandages per week and the hospital operates 52 weeks per year.

The price of bandages (v) is $ 35 per box and the cost of holding one box for a year is 15 percent of the value of the material (r).

The cost of processing an order is $ 15.

Demand is normally distributed, with a standard deviation of weekly demand of 100 boxes (Sigma t).

The lead time is 2 weeks (L).

Cycle-service level is 97 percent.

Please do not round the numbers (use 2 decimal points.)

a. What is the EOQ for this item?

b. What is the time between reviews or P in weeks?

c. What is the average demand during the production interval (Xbar P+L)?

d. What is the desired safety stock (SS)?

e. What is the target inventory level (T)?

f. What is the ordering cost at the lot size of EOQ?

g. What is the holding cost at the lot size of EOQ?

h. What the safety stock cost?

i. What is the total cost?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92464721

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