Question 4-2 SHOW ALL WORK Table 5 Demand 52,000 units/year Standard deviation o

ID: 2766622 • Letter: Q

Question

Question 4-2 SHOW ALL WORK

Table 5

Demand

52,000 units/year

Standard deviation of weekly demand

120 units

Ordering costs

$50 /order

Holding cost

$0.60/unit/year

Cycle-service level

95%

Lead time

2 weeks

Number of weeks per year

52 weeks

A firm uses the periodic review system to control the item depicted above. It reviews the item's status every three weeks (P = 3). At the most recent review an inventory clerk just checked the inventory of this item and found 1200 units. There were no scheduled receipts and no back orders. How many units should be ordered?

Select one:

a. Less than or equal to 3500 units

b. Greater than 5000 units

c. Greater than 4500 but less than or equal to 5000 units

d. Greater than 3500 but less than or equal to 4500 units