Sam's Cat Hotel operates 52 week per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.00. per bag. The following information is available about these bags.
Demand = 80 bags per week
Order Cost =$55 per order
Annual holding Cost = 25 percent of cost
Desired cycle-service level = 90 percent
Lead time = 1 week(s) (5 working days)
Standard deviation of weekly demand =10 bags
Current on-hand inventory is 325 bags, with no open borders or back orders
a. What is the EOQ? Sam's optimal order quantity is ____bags. (Enter your response rounded to the nearest whole number.)
b. What should R be?
c. An inventory withdraw of 10 bags was just made. Is it time to reorder?