# Question: annual demand 2500 holding cost per bracket per year 150...

###### Question details

Annual Demand | 2,500 |

Holding cost per bracket per year | $1.50 |

Order cost per order | $18.75 |

Lead time | 10 days |

Working days per year | 250 |

The Economic Order Quantity is **250 units**.

The average inventory is **125 units**.

The Inventory Holding Cost is **$187.50**.

**10 orders** would be made each year, at an annual
order cost of **$187.50**.

The Total Annual Cost of managing the inventory is
**$375.00 per year**.

The time between orders is **25 days**.

The average *WEEKLY* demand is **50**
**units** with a standard deviation of **12
units**.

**QUESTIONS:**

1) Henry’s proposal and a periodic review system where orders
are placed regularly every **four weeks**.

- Find the level of the safety stock if the cycle service level is to stay at 98%.
- Find the number of orders per year and the annual ordering cost.
- Find the average order size and the annual cost of holding the cycle inventory (excluding the safety stock).
- Find the total annual inventory cost of this system, including the cost of the merchandise and the holding cost of the safety stock.
- You are currently at a reorder point and find that there are exactly 130 units left in stock. How many units should you order?
- Determine the probability that you experience a stockout situation before the current order is delivered.