The lead time for an order is 1 week also the standard, Ask an Expert

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Q. A1 Kitchens. Inc. installs kitchen cabinets, countertops also floors. A1 uses 30,000 tubes of caulk per year (Suppose 50 weeks per year) in the installation process. The order cost is $24 per order also the holding cost is $0.15 per tube of caulk. The lead time for an order is 1 week also the standard deviation of demand is 25 tubes per week.

(a) Elucidate what is A1Õs optimal order quantity?

(b) Elucidate what is the optimal number of orders per year?

(d) Elucidate what value of z should be used if A1 wishes to achieve a cycle-service level of 94 %?

(e) Elucidate what should the reorder point be?

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