What cycle-service level does this imply

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Reference no: EM131039346

The XYZ Industrial Supplier Co. is a wholesaler/distributor located in Alberta, Canada, that supplies industrial clients with fasteners (nut, bolts, etc.), work gloves, and seemingly everything in between. Consider a specific high -quality work glove that has a special grip material on the palm and fingers, which makes it appropriate for use by moving companies, glass companies, and many other industries: XYZ sells these gloves from their inventory to their customers (in full cases only, where a case hold 12 pairs of gloves). Inventory of the gloves at the XYZ warehouse is replenished through orders with the manufacturer of the gloves, which is located in Syracuse, NY. XYZ collected the following specific inventory-related data: Weekly demand (in cases): average 17/week; standard deviation 7/week Annual demand (in cases; assuming that demand occurs 52 weeks/year): 884 Purchase price (XYZ pays manufacturer) per case: $72 Canadian XYZ cost to place order with manufacturer: $45 per order (includes administrative costs to issue purchase order, invoice payment, etc.) XYZ annual cost to hold inventory: 27% of value Lead-time for replenishment from manufacturer: two weeks Your Question: XYZ currently places a replenishment order for gloves when their inventory position reaches 50 units. What cycle-service level does this imply? a. 98.9% b. 92.9% c. 73.9% d. 94.6% e. 89.0%

Reference no: EM131039346

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