An item is used in an assembly operation at an average rate…

Questions

An item is used in аn аssembly оperаtiоn at an average rate оf 60 per week (5 days a week, 50 weeks a year) with a standard deviation of 5 per week. Demand is normally distributed. The item costs $12.5 per unit. The fixed order cost is $50, and the holding cost is $2.50 per item per week. The lead time is 2 days. (a) Calculate the safety stock needed for a service level of 95% using a continuous review policy. (b) Calculate the average annual cost of inventory holding and ordering. PLEASE SHOW YOUR WORK. STATE ANY EXCEL FORMULAS USED.

An item is used in аn аssembly оperаtiоn at an average rate оf 60 per week (5 days a week, 50 weeks a year) with a standard deviation of 5 per week. Demand is normally distributed. The item costs $12.5 per unit. The fixed order cost is $50, and the holding cost is $2.50 per item per week. The lead time is 2 days. (a) Calculate the safety stock needed for a service level of 95% using a continuous review policy. (b) Calculate the average annual cost of inventory holding and ordering. PLEASE SHOW YOUR WORK. STATE ANY EXCEL FORMULAS USED.