The manager of the Dyson store at Westgate mall is planning for
the inventory of its Supersonic Hair Dryer. Assume a fixed-order
quantity system. Here is the information needed:
Average Demand for the hair dryer: 20 units/week
Lead time = 5 weeks
Order cost = $800/order
Unit cost = $500
Carrying rate = 20%
Standard deviation of weekly demand = 30
Desired service level = 95% (z-value = 1.645)
Number of weeks per year = 52
Calculate the economic order quantity and the reorder point to have
95% service level. Discuss the advantages and disadvantages of the
fixed-order quantity system.
(20 marks)
The manager of the Dyson store at Westgate mall is planning for the inventory of its Supersonic Hair Dryer. Assume a fix
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