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  3. please answer each part (ii) a regional distribu

please answer each part (II) A regional distributor purchases discontinued appliances from various...

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Accounting

imageplease answer each part
(II) A regional distributor purchases discontinued appliances from various suppliers and then sells them on demand to retailers in the region. The distributor operates 5 days per week, 52 weeks per year. Only when it is open for business can orders be received. Management wants to reevaluate its current inventory policy, which calls for order quantities of 440 counter-top mixers. The following data are estimated for the mixer: - Average daily demand d=100 mixers -Standard deviation of daily demand d=30 mixers - Lead time (L)=3 days - Holding Cost (H)=$9.40 /order/year - Ordering Cost (S)=$35 order - Cycle service level =92% - The distributor uses a continuous review (Q) system a) What order quantity Q, and reorder point, R, should be used? (4 marks) b) What is the total annual cost of the system? (4 marks) c) If on-hand inventory is 40 units, one open order for 440 mixers is pending, and no backorders exist, should a new order be placed? (7 marks)

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