Scenario 9.10 Demand = 52,000 Units/year

Scenario 9.10
Demand = 52,000 units/year
Standard deviation of weekly demand = 110 units
Ordering costs = $45/order
Holding costs = $0.50/unit/year
Cycle-service level = 90%
Lead time = 2 weeks
Number of weeks per year = 52 weeks
A normal distribution table is appended to this exam.
-Use the information in Scenario 9.10.A firm uses the periodic review system to control the item depicted above.It reviews the item's status every three weeks (P = 3) .At the most recent inventory review,an inventory clerk found 1,500 units.There were no scheduled receipts and no backorders.How many units should be ordered? (Hint: You must calculate T before answering this question. )

A) 0 units
B) greater than 0 but less than or equal to 3,750 units
C) greater than 3,750 but less than or equal to 4,000 units
D) greater than 4,000 units

Correct Answer:

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