How many units should be ordered

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A golf specialty wholesaler operates 50 weeks per year. Management is trying to determine an inventory policy for its? 1-irons, which have the following? characteristics:

Demand ?(D) = 2,000 ?units/year, normally distributed
Standard deviation of weekly demand? = 3 units
Ordering cost? = ?$ 50 ?/order
Holding cost? (H) = $ 6.00?/unit per year
Desired service level? = 90 ?%
Lead time? (L) = 5 weeks

-If the company uses a periodic review system, what should the review period (P) be (in weeks)?
-If the company uses a 2-week ordering period (P=2 weeks), how much safety stock should the company carry?
-Suppose the company holds 20 units in safety stock, and uses a two-week ordering period. It is time to place an order, and the manager counts a current net inventory position of 100 units. How many units should be ordered?

Reference no: EM132910470

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