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What is cas annual cost of holding cycle stock

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Reference no: EM132728472

Crapo Appliance Service (CAS) specializes in repairing vacuum cleaners. CAS receives weekly deliveries from its vacuum cleaner belt supplier, who replenishes belts up to a level that Crapo Appliance is free to specify. CAS buys a very popular belt at a unit price of $17.50. The annual inventory carrying charge is 20%. Weekly demand for belts is normally distributed with mean 86 and standard deviation 24. CAS' management wants to limit the probability of a stock-out on any given week not to exceed 1%.

- What replenishment level would you recommend?
- What is CAS' average level of safety stock?
- What is CAS' annual cost of holding cycle stock?

Reference no: EM132728472

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