Inventory management plan for fluorescent bulbs

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Reference no: EM132198478

Phoenix Valley Lighting is preparing an inventory management plan for fluorescent bulbs. They have a forecasted demand of 11,593 bulbs per month with a MAD of 207 bulbs per month. The lead time to receive bulbs is 2 week(s) and they would like to have a 99% service level to avoid turning away customers. Their ordering cost is $518 and their holding cost is $4 per bulb (breakage)per year.

When doing all calculations assume that there are 4 weeks in 1 month and there are no other contractual requirements on order quantities or frequencies.

If following a fixed time inventory system with a review period of 2 weeks, what should their order up to quantity be? Be sure to enter your results with two decimal places.

Reference no: EM132198478

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