The following information has been collected on an independent demand item:
Demand units per week (assume 52 weeks/ year)
Ordering and setup cost per order
Holding cost per unit per year
Lead time week
Standard deviation in weekly demand units Cycle- service level
You will need to refer to a normal table to answer the question(s) .
-Use the information from Table 5.11. Design a continuous review system (Q system) for this item, making Q equal to the EOQ. Assume that the demand during lead time is normally distributed. What are the desired values for Q and R?
A) Q is between 121 and 125, and R is between 80 and 84.
B) Q is between 138 and 142, and R is between 39 and 42.
C) Q is between 121 and 125, and R is between 53 and 57.
D) Q is between 138 and 142, and R is between 34 and 38.
Correct Answer:
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Peterson Enterprises uses a continuous
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