Calculate the p and find the ss and t

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Reference no: EM131257441

Your firm uses a periodic review (P) system and operated 52 weeks per year. One of the items has following characteristics:
Demand = 20,000 units/year
Ordering cost = $40/order
Holding cost = $2/unit/year
Lead Time = 2 weeks
Cycle Service Level = 95%

• Calculate the P that gives approximately the same number of orders per year as the EOQ. Round down your answer to the nearest week.

• Find the SS and T corresponding to the 95% service level.

• Compare SS for the Q and the P system. Which one has a bigger SS. Explain why.

Reference no: EM131257441

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