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A shoe company is considering a change in its current inventory system. The information regarding the shoes is as follows:
Average demand = 200 pairs/week
Lead time = 3 weeks
Order cost = $65 per order
Unit cost = $20
Carrying charge rate = .20
Desired service level = 95 percent
Standard deviation of weekly demand = 50
Number of weeks per year = 52
Q: What should be the reorder point to have a 95 percent service level?
Consider an optional replenishment system (also called a min-max or (s,S) system) for inventory control. This type of system was simulated in the lab, and is described in the textbook. For each of the following statements, indicate whether it will be..
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Assuming that units in inventory are valued (based on COGS) at $500 per unit and are sold at $800, how fast does the company turn its inventory?
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