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 = 200 units per day, with a standard deviation of 19 units
Average lead time = 19 days with a standard deviation of 2 days
250 days per year
Unit cost = $30
Desired service level = 90%
Ordering cost = $60
Inventory carrying cost = 20%
Calculate annual inventory carrying cost. (Round your answer to the nearest dollar amount.)
1. Calculate annual product cost. (Round your answer to the nearest dollar amount.)
2. Calculate total cost. (Round your answer to 2 decimal places.)
3. Calculate average cycle stock.
4. Calculate average inventory.