Company wants to maintain service level

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Reference no: EM132117941

1. The average demand of Product X is 200 units per month with the standard deviation 50 units per month and the delivery lead time 3 months. What is the ROP if the company wants to maintain a service level of 95%?

- About 600 units

- About 850 units

- About 750 units

- About 165 units

2. Product Z costs $10 each and has a holding cost rate of 25% per year. The ordering costs are $100 per order, and the annual demand is 4,500 units. The economic order quantity is about 600 units. Determine the total inventory costs (i.e., ordering costs + holding costs) per year.

- About $600

- About $750

- About $1,200

- About $1,500

Reference no: EM132117941

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