Crew Soccer Shoes Company is considering a change of their current inventory-control system for soccer shoes. The information regarding the shoes is given below:
|Demand = 90 pairs/week|
|Lead time = four weeks|
|Order cost = $35/order|
|Holding cost = $2.00/pair/year|
|Cycle service level = 91 percent|
|Standard deviation of weekly demand = 45|
|Number of weeks per year = 52|
The company decides to use a fixed-order quantity system. What would be the reorder point and the economic order quantity? Round your answers to the nearest whole number.
Economic order quantity: units
Reorder point: units
In this system, at the beginning of the current week, the materials manager, Luke Thomas, checked the inventory level of shoes and found 300 pairs. There were no scheduled receipts and no back orders. Should he place an order? Explain your answer.
Since the inventory level of 300 pairs is -Select-lowerhigherItem 3 than the reorder point, Emily -Select-shouldshould notItem 4 place an order.
If the company changes to a fixed-period system and reviews the inventory every three weeks (T = 3), how much safety stock is required? Round your answer to the nearest whole number.