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Sam's Cat Hotel operates 52 week per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.00. per bag. The following information is available about these bags.

Demand = 80 bags per week

Order Cost =$55 per order

Annual holding Cost = 25 percent of cost

Desired cycle-service level = 90 percent

Lead time = 1 week(s) (5 working days)

Standard deviation of weekly demand =10 bags

Current on-hand inventory is 325 bags, with no open borders or back orders

a. What is the EOQ? Sam's optimal order quantity is ____bags. (Enter your response rounded to the nearest whole number.)

b. What should R be?

c. An inventory withdraw of 10 bags was just made. Is it time to reorder?

Operation Management, Management Studies

  • Category:- Operation Management
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