Find economic order quantity of each item

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Reference no: EM133642806

Questions

1. Perform an ABC analysis and categorize the items into A, B, and C categories.

2. Find the economic order quantity of each item. Do these ordering quantities vary a lot from item to item? What would you say about the variation if any?

3. Find the total annual cost of holding and ordering (holding cost + ordering cost) for each item. Is there a relationship between the category of an item and the total cost?

4. The company wants to achieve a 99% service level. The lead times (in weeks) for each item and the weekly standard deviations of demand are given in the following table. The company operates 50 weeks a year. 4. Find the reorder point and safety stock for each item.

5. What is the cost of carrying the safety stock for each item? Which category of items has the highest safety stock? Based on your observation can you conclude that the category here will always have the highest safety stock irrespective of this case?

Reference no: EM133642806

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