Sam’s Cat Hotel operates 52 weeks per year, 7 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.00 per bag. The following information is available about these bags. Refer to the standard normal table for z-values. Demand-80 bags/week Order cost $55/order Annual holding cost-30 percent of cost >Lead time 4 week(s) (28 working days) Standard deviation of weekly demand 10 bags >Current on-hand inventory is 310 bags, with no open orders or backorders.
Expert Answer
Weekly demand = 80 bags
Number of weeks per year = 52 weeks
Annual demand (D) = 80 x
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