Use continuous review inventory system

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Reference no: EM131777036

Osprey Sports stocks everything that a musky fisherman could want in the Great North Woods. A particular musky lure has been very popular with local fishermen as well as those who buy lures on the Intenet from Osprey Sports. The cost to place orders with the supplier is $40/order, the demand averages 3 lures per day, with a standard deviation of 1 lure; and the inventory holding cost is $1.00/lurelyear. The lead time form the supplier is 9 days, with a standard deviation of 2 days. It is important to maintain a 95 percent cycle-service level to properly balance service with inventory holding costs. Osprey Sports is open 350 days a year to allow the owners the opportunity to fish for muskies during the prime season. The owners want to use a continuous review inventory system for this item. Refer to the standard normal table for z-values.

a. What order quantity should be used lures. (Enter your response rounded to the nearest whole number.)

b. What reorder point should be used lures. (Enter your response rounded to the nearest whole number.)

Reference no: EM131777036

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