Continuous review system to control the inventory

Assignment Help Operation Management

Reference no: EM13902975

A store has collected the following information on one of its products:

Demand = 4,500 units/year

Standard deviation of weekly demand = 12 units

Ordering costs = $40/order

Holding costs = $3/unit/year

Cycle-service level = 90% (z for 90% = 1.28

Lead-time = 2 weeks

Number of weeks per year = 52 weeks

a. If a firm uses the continuous review system to control the inventory, what would be the order quantity and reorder point?

b. The firm decided to change to the periodic review system to control the item’s inventory. For the most recent review, an inventory clerk checked the inventory of this item and found 300 units. There were no scheduled receipts or backorders at the time. How many units should be ordered? (HINT: Use the EOQ model to derive P, the time between reviews.)

Reference no: EM13902975

Questions Cloud

What are five methods to avoid a crisis situation : What are five methods to avoid a crisis situation in contract negotiations? Explain in what stage they are best utilized. Your response should be at least 200 words in length. Cite and reference work.

Journey from the underground den to sunlight symbolizes : According to Plato's Allegory of the Cave, the journey from the underground den to sunlight symbolizes the

Thermostats are subjected to rigorous testing : Thermostats are subjected to rigorous testing before they are shipped to air conditioning technicians around the world. Results from the last five samples are shown in the table. Is the process under control?

Describe some of the challenges in the integration : 1. Write two solid paragraphs with at least one reference to fully answer the following: Describe some of the challenges in the integration of forward and reverse supply chains.

Continuous review system to control the inventory : If a firm uses the continuous review system to control the inventory, what would be the order quantity and reorder point? The firm decided to change to the periodic review system to control the item’s inventory. For the most recent review, an invento..

Social security benefits pass to persons heirs upon death : Which of the following statements is the most accurate? A pension is a benefit that only congress people get. IRAs and SEP-IRAs are designed to allow small businesses or the individuals who work in them to establish retirement funding. 401(k)s and pe..

Describe net operating loss carry-backs and carry-forwards : Please describe net operating loss carry-backs and carry-forwards and how they can be used, and discuss how many years they can be used.

Create new business that you would like to operate : Create a new business that you would like to operate. Would you select an LLC, an LLP, or a corporation to form your company? Provide a detailed explanation as to why that entity would be appropriate for you. Support your choice with the applicable l..

Which is the only membership-based benefit or award : Of the following, which is the only membership-based benefit or award?

User Account

All Pages