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Business, 27.06.2019 03:50 Marissa101

Your firm uses a periodic review system for all skus classified, using abc analysis, as b or c items. further, it uses a continuous review system for all skus classified as a items. the demand for a specific sku, currently classified as an a item, has been dropping. you have been asked to evaluate the impact of moving the item from continuous review to periodic review. assume your firm operates 52 weeks per year; the item's current characteristics are: demand (d)equals14 comma 560 units/year ordering cost (s)equals$135.00/order holding cost (h)equals$4.00/unit/year lead time (l)equals7 weeks cycle-service levelequals97% demand is normally distributed, with a standard deviation of weekly demand of 80 units. a. calculate the item's eoq. eoqequals 992 units. (enter your response rounded to the nearest whole number.) b. use the eoq to define the parameters of an appropriate continuous review and periodic review system for this item. refer to the standard normal table when necessary. under a continuous review system, order nothing units whenever the inventory level drops to nothing units. (enter your responses rounded to the nearest whole number.)

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