Standard deviation of demand during leadtime

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Reference no: EM132234895

Grey Wolf Lodge is a popular 500-room hotel in the North Woods. Managers need to keep close tables on all room service items, including a special pine-scented bar soap. The daily demand for the soap is 200 bars, with a standard deviation of 30 bars. Ordering cost is $8 and the inventory holding cost is $0.30/bar/year. The leadtime from the supplier is 3 days, with a standard deviation of 1 day. The lodge is open 365 days a year.

1. What is the economic order quantity for the bar of soap?

2. Using EOQ, what is the optimal time between orders?

3. What is the standard deviation of demand during leadtime?

4. What will be the required safety stock to achieve a 96 percent cycle-service level?

5. What is be the reorder point?

6. What is the total annual cost for the bar of soap, assuming a Q system will be used?

Reference no: EM132234895

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