Compute the appropriate reorder point

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Reference no: EM131276162

Beauty and The Beatz (B&B) sells and installs car audio systems. The weekly demand for car audio systems follows a normal distribution with mean 70 systems per week and standard deviation 55 systems per week.? B&B reviews its inventory every 14 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 ?$150per system. Annual holding cost is 25% 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.

Safety stock? =

nothing

units ?(round your response to two decimal? places).

?b) Compute the appropriate reorder point.

Reorder Point? =

nothing

units

?(round your response to two decimal? places).

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

?(round your response to nearest? dollar)

Reference no: EM131276162

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