Sam's Cat Hotel operates 49 weeks per year, 7 days per week. It purchases kitty litter for $ 7.00 per bag. The following information is available about these bags:
Demand = 65 bags/week
Order cost = $60/order
Annual holding cost = 30 percent of cost
Desired cycle-service level=96 percent
Lead time = 2 week(s) (14 working days)
Standard deviation of weekly demand = 4 bags
Current on-hand inventory is 250 bags, with no open orders or backorders.
Suppose that Sam's Cat Hotel uses a P system. The average daily demand {\d }\bar{d} is 9 bags (65/7) and the standard deviation of daily demand ?” standard deviation of weekly demand / \sqrt{}days per week" is 1.512 bags. Please answer all parts.
a. What P (in working days) and T should be used to approximate the cost trade-offs of the EOQ?
The time between orders, P, should be____days (Enter your response rounded to the nearest whole number.)
The target inventory, T, should be___ days (Enter your response rounded to the nearest whole number.)
b. How much more safety stock is needed than with a Q system ____ bags. (Enter your response rounded to the nearest whole number.)
c. It is time for the periodic review. How much kitty litter should be ordered ___bags. (Enter your response as an integer.)