Develop a fixed period inventory ordering structure

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Reference no: EM131632079

Dunstreet’s Department Store would like to develop a fixed period inventory ordering structure for its white percale sheets. The store has established a policy of satisfying 95 percent of demand from items in stock. The demand for white percale sheets is 5,000 annually. The store is open 365 days per year. Holding cost equals to $1.80 per sheet per year. Each order to its distributor costs the store $20 per order. It always takes 10 days for the sheets to be delivered. Standard deviation of demand for the sheets is 5 per day. Find out:

a. Order review interval (i.e. the time in-between inventory positions),

b. Safety stock quantity,

c. Replenishment level (i.e. order up to level),

d. If at one of the inventory positioning points, the manager finds that there are still 120 sheets left in stock, how many additional sheets she should order?

Reference no: EM131632079

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