Question

In: Operations Management

?Ollah's Organic Pet Shop sells about 6 comma 0006,000 bags of? free-range dog biscuits every year....

?Ollah's Organic Pet Shop sells about 6 comma 0006,000 bags of? free-range dog biscuits every year. The fixed ordering cost is $3030?, and the cost of holding a bag in inventory for a year is ?$1.251.25.

Click the icon to view the table of z values.

z value   

0.84

?80%

1.28

?90%

1.65

?95%

2.33

?99%

3.08

?99.9%

a. What is the economic order quantity for the? biscuits?

The EOQ is

?(Enter your response rounded to the nearest whole number.?)

b. Suppose Ollah decides to order 280280 bags at a time. What would the total ordering and holding costs for the year? be? (For this? problem, don't consider safety stock when calculating holding? costs.)

The total ordering and holding costs are

?(Enter your response rounded to the nearest dollar.?)

c. Average weekly demand for? free-range dog biscuits is 9292 bags per? week, with a standard deviation of 2323 bags. Ollah uses a continuous inventory review system to manage inventory of the biscuits. Ollah wants to set the reorder point high enough that there is only a 2020?% chance of running out before the next order comes in. Assuming that the lead time is a constant 77 weeks, what should the reorder point? be?

The reorder point is ........bags. ?(Enter your response rounded to the nearest whole? number.)

Solutions

Expert Solution

keosha answered 8 months ago
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