As assistant manager of a soccer specialty store you have been asked to review the
inventory costs associated with the store's best selling soccer shoe. The information you have available concerning this shoe follows:
Average Demand =18 pairs per week; Standard Deviation of demand = 6 pairs
Lead time for ordering shoes= 1 week; Ordering cost = $32 per order
Cost of a pair = $90; Carrying cost per pair per year = 10% of cost of per pair
Service level =98%, Z =2.05; The store operates 50 weeks per year.
(1) If the economic lot size model is applied, what is the optimal order cost (Q) and
total cost per year(TC) for the best selling soccer shoe?
(2) If the continuous review inventory policy -(Q,R) policy is applied，what is
the record level R for the bestselling soccer shoe?
(3) If the periodic review inventory policy- bask-stock level policy is applied and the manager checks the stock level every 3 weeks, what is the base-stock level the store should maintain?
