Business, 05.05.2020 20:29, alialoydd

Your firm uses a periodic review system for all SKUs classified, using ABC analysis, as B or C items. Further, it uses a continuous review system for all SKUs classified as A items. The demand for a specific SKU, currently classified as an A item, has been dropping. You have been asked to evaluate the impact of moving the item from continuous review to periodic review. Assume your firm operates 52 weeks per year the item's current characteristics are: Demand (D) = 13,000 units/year Ordering cost (S) = $115 00/order Holding cost (H) = $3, 50/unit/year Lead time (L) = 8 weeks Cycle-service level = 97% Demand is normally distributed, with a standard deviation of weekly demand of 66 units. Calculate the item's EOQ.

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Your firm uses a periodic review system for all SKUs classified, using ABC analysis, as B or C items...