Walmart inventory policy of this popular brand chairs

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Reference no: EM132296112

Walmart continuously reviews its inventory levels for chairs. For one particular popular brand, it currently buys 180 on each order. Demand is 5,200 per year (100 per week) with a standard deviation of 50 per week. The supplier has a 3-week lead time. The ordering cost is $100 and the holding cost is $30/chair/year. You can assume that Walmart owns the chairs when they are delivered and the desired service level is 90%.

(a) Calculate the necessary parameter(s) (i.e., order amount and reorder point) for Walmart's inventory policy of this popular brand chairs.

(b) What is the safety stock level with this inventory policy?

Reference no: EM132296112

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