14%) A company begins a review of ordering policies for a sample of items. The company...

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14%) A company begins a review of ordering policies for a sampleof items. The company operates 52 weeks a year. The following arethe characteristics of one item: Demand = 3,380 units/year Orderingcost = $50/order Holding cost = $13/unit/year Lead time = 3 weeksStandard deviation of weekly demand = 16 units Desired cycleservice level = 98% a) Calculate EOQ and use it to find the orderinterval (OI). Round the number to the nearest integer week. Hint:D/Q will give you the # of orders to place in a year; orderinterval = review interval. b) Suppose the company just finished aperiodic review and found 20 units of on-hand inventory, how manyunits should be ordered (i.e. amount to order)?

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Demand D 3380 unitsyear Working weeks per year 52 Average weekly demand d 338052 65 units Ordering cost S 50order Holding cost H 13unityear See Answer

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