Compute average inventory on order

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Reference no: EM131839328

Question: Beauty&TheBeatz (B&B) sells and installs car audio systems. The weekly demand for car audio systems follows a normal distribution with mean 65 systems per week and standard deviation 77 systems per week.? B&B reviews its inventory every 21 days. It takes 14 days to receive an order delivery (assume 7 days per week). B&B would like to maintain a service level of 95?%. B&B purchases the systems from a supplier for $110 per system. Annual holding cost is 20% of the purchase cost per audio system. You may use the following table of values for the Standard Normal distribution to find your z value.

a) Compute the safety stock level you recommend for? B&B.

b) Compute average inventory on order

c) Compute the annual holding cost for carrying the safety stock

Reference no: EM131839328

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