A sporting goods company has a distribution center that maintains inventory of fishing rods. The fishing rods have the following demand, lead time, and cost characteristics: Average demand = 230 units per day, with a standard deviation of 22 units Average lead time = 22 days with a standard deviation of 1 day 250 days per year Unit cost = $30 Desired service level = 97.5% Ordering cost = $57 Inventory carrying cost = 20%
1) Calculate annual ordering cost
2) Calculate average cycle stock.
3) Calculate average inventory.