Demand is normally distributed with a standard deviation of

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Your firm uses a fixed order quantity system and operates 52 weeks per year. One of the items handled has the following characteristics

Annual Demand = 20,000 units

Order Cost = $ 40 per order

Holding Cost = $ 2 per unit per year

Lead time = 2 weeks

Demand is normally distributed with a standard deviation of weekly demand of 100 units.

a) Calculate the item's EOQ. What is the average time between orders (in weeks)

b) Find the safety stock and reorder point that provide a 95% customer service level

Reference no: EM13387770

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