Calculate the P (in workdays, rounded to the nearest day) that gives approximately the same number of orders per year as the EOQ.
A regional distributor purchases discontinued appliances from various suppliers and
then sells them on demand to retailers in the region. The distributor operates 5 days
per week, 52 weeks per year. Only when it is open for business can orders be
received. The following data are estimated for the mixer:
Average daily demand (d) = 100 mixers
Standard deviation of daily demand (d) = 30 mixers
Lead time (L) = 3 days
Holding cost (H) = $9.40/unit/year
Ordering cost (S) = $35/order
Cycle-service level = 92 percent
Suppose that a periodic review (P) system is used at the distributor.
Step 1 : Calculate the P (in workdays, rounded to the nearest day) that gives
approximately the same number of orders per year as the EOQ.
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