Compute total inventory cost for the eoq computed

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Reference no: EM132267013

A store has collected the following information on one of its products: Demand = 4,500 units/year Standard deviation of weekly demand = 12 units Ordering costs = $40/order Holding costs = $3/unit/year Cycle-service level = 90% (z for 90% = 1.28) Lead-time = 2 weeks Number of weeks per year = 52 weeks a. If a firm uses the continuous review system to control the inventory, what would be the order quantity and reorder point? 6 points b. Compute total inventory cost (ordering cost + holding cost + safety stock cost) for the EOQ computed above. c. Compute total inventory cost (ordering cost + holding cost + safety stock cost) for an order quantity of 500 units.

Reference no: EM132267013

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