Part a what is the order size part b what is the reorder, Operation Management

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Part a what is the order size part b what is the reorder

The KAB Corporation's daily demand for item XYZ is normally distributed with a mean of 50 units. The replenishment lead time is 10 days, and the standard deviation of demand during lead time is 12.65 units. The order cost is $40 and the unit holding cost per year is $3. KAB operates 365 days per year.

Part A: What is the order size?

Part B: What is the reorder point if a 90% cycle service level is desired?

Part C: If the reorder point is instead set at 505, what is the implied cycle service level chosen by the company?

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Operation Management: Part a what is the order size part b what is the reorder

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Operation Management: Part a what is the order size part b what is the reorder

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