# dolution

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 = 170
units per day, with a standard deviation of 16 units Average lead time = 16
days with a standard deviation of 1 day

250 days per year

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Unit cost = \$25

Desired service level =
97.5%

Ordering cost = \$59

Inventory carrying cost
= 20%

a. What is the standard
number.) Standard deviation 182 units es

b. How much safety stock
should be carried? (Round up your answer to the next whole number) Safety stock
1,002 unks

c. Calculate EOQ. (Round

d. Calculate annual
ordering cost. (Round your answer to 2 decimal places.) Annual ordering cost

e. Calculate annual
Annual Inventory carrying cos!

f. Calculate annual
product cost. (Round your answer to the nearest dollar amount.) Annual produce
cost \$ 1,062,500

e. Calculate annual
Annual Inventory carrying cost

f. Calculate annual
product cost. (Round your answer to the nearest dollar amount.) Annual product
cost \$ 1,062,500

g. Calculate total cost.
(Round your answer to 2 decimal places.) Total cost \$ 1,067 507.49 h. Calculate
average cycle stock. Average cycle stock units

i. Calculate average
inventory Average inventory units

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