Alice opens an aquarium store in a lively shopping mall and finds business to be booming, but she often stocks out of ke

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Alice Opens An Aquarium Store In A Lively Shopping Mall And Finds Business To Be Booming But She Often Stocks Out Of Ke 1 (121.89 KiB) Viewed 49 times

Alice opens an aquarium store in a lively shopping mall and finds business to be booming, but she often stocks out of key items customers want. She decides to experiment with inventory-control methods, such as using a fixed-order quantity (FQS) and/or fixed-order period (FPS) systems. The FLUVAL 303 Pump, a high margin and profitable pump, is one of her best sellers, but it stocks out frequently. You collect the following data with respect to this pump's sales. Demand four units per week Store open = 50 weeks/year Lead-time four weeks Order cost = $20/order Item cost $210/pump Std. deviation in weekly demand = 6 Service level = 97 percent Inventory-holding cost = 10 percent per year a. What is inventory-carrying (holding) cost pump year? Round your answer to the nearest dollar. $ /pump/year b. What is the economic order quantity? Round your answer to the nearest whole number. pumps c. What is the average number of orders per year if using the EOQ? Do not round intermediate calculations. Round your answer to one decimal place. orders/year d. What is the reorder point without safety stock? Round your answer to the nearest whole number. units e. What is the safety stock quantity? Round your answer to one decimal place. units f. What is the reorder point with safety stock? Use Appendix A to determine z-value. Round z-value to two decimal places. Do not round intermediate calculations. Round your answer to one decimal place. pumps g. If the current order quantity used by Alice is 10 pumps order, how much money can she save by adopting an EOQ ordering policy? Do not round intermediate calculations. Round your answer to the nearest dollar.