solution
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:
Annul demand = (19998) units
Economic order quantity=1100 units
Lead time = 2weeks
Cycle service level = 95 %
Demand is normally distributed, with a standard deviation of weekly demand of 50 units.
Use the EOQ to define the parameters of an appropriate periodic review system for this item. Which system requires more safety stock and by how much?
If you decide to produce the item by your internal resources, what is the economic production lot size, if the production rate is (700) units per week? and what is the cycle inventory
Annul demand = (19998) units
Economic order quantity=1100 units
Lead time = 2weeks
Cycle service level = 95 %
Demand is normally distributed, with a standard deviation of weekly demand of 50 units.
Use the EOQ to define the parameters of an appropriate periodic review system for this item. Which system requires more safety stock and by how much?
If you decide to produce the item by your internal resources, what is the economic production lot size, if the production rate is (700) units per week? and what is the cycle inventory
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"
