Reference no: EM132223347

Case Study : Bold Bodybuilders, Inc. Bold Bodybuilders, Inc. is a large sporting goods store that operates 52 weeks per year. It has become the exclusive distributor of the new body building equipment called Geni. After carrying the equipment for a year, Joe Sabatini, a manager of supply chain, decided to analyze the company's inventory policy for Geni. On the basis of the past year's record, Joe has identified the following. The annual demand for Geni is considered to be 6,240 units, annual carrying cost per equipment is $95, and ordering cost is $3,550 per order. The equipment price is $380 per unit. The new order is made when the inventory level in the store drops to a predetermined number of units on hand. Once the company orders Geni from the supplier, it will come to the store in about two weeks. However, the demand for Geni in the store can vary with the standard deviation of demand equal to 5.6 units per week. Questions. 1. Explain what inventory planning and ordering system you are going to use in this case and why. 2. Identify the optimal order quantity, total annual inventory cost, and reorder point (demand during lead time). Explain your results. 3. What are the best safety stock and reorder point that guarantee with a probability of 99% that the store will not run out of stock of the Geni equipment? Explain your results.