A company has been adopting the system of continuous replenishment in the control of its...
70.2K
Verified Solution
Link Copied!
Question
Finance
A company has been adopting the system of continuous replenishment in the control of its inventories and uses the processing of orders according to the policy of minimum costs, generating a purchase order for 15,000 units of a certain stock item. The monthly demand for this item is 7,500 units, which is normally distributed with a standard deviation of 600 units. The average time between processing an order and receiving the item at the company's distribution center is three weeks. Issuing an order has an estimated average cost of R $ 1,250.00. As this item is critical, the company adopts a 95% service level to meet the requirements of the demand. Consider the month with 4 weeks. Determine: The. The safety stock and order point for that stock item. B. B. The total cost of the inventory policy that has been adopted considering that the acquisition price of this item is R $ 8.00 per unit. Considering that the company starts to adopt a system of pe-riodic reviews of the stock of this item every two months, it is asked: The. What is the maximum expected stock target? B. If today was the day for reviewing the inventory of that item and there are 5,000 units in stock and a balance of order receivable of 1,200 units, what quantity should the company order from the manufacturer of that item? Calculate the period (inventory review) in weeks that results in approximately the same number of orders per year as the continuous review system.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!