Assignment task: Sam's Cat Hotel operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.70 per bag. The following information is available about these bags. Demand = 90 bags/week Order cost = $ 54/order Annual holding cost = 27 percent of cost Desired cycle@service level = 80 percent Lead time = 3 weeks 118 working days2 Standard deviation of weekly demand = 15 bags Current on-hand inventory is 320 bags, with no open orders or backorders.
What should R be?
An inventory withdrawal of 10 bags was just made. Is it time to reorder?