1. Suppose that your firm uses a periodic-review system, but otherwise the data are the same as in Problem 2.
· Demand (D) = 14,000 units/year
· Ordering cost (S) = $320/order
· Holding cost (H) = $4/unit/year
· Lead time (L) = 3 weeks
· Cycle-service level = 95%
· Weekly standard deviation=120 units
· on-hand inventory is 1,308 units
a. Calculate the P that gives approximately the same number of orders per year as the EOQ. Round your answer to the nearest week.
b. Find the safety stock and the target inventory level that provides a 95 percent cycle-service level.
c. How much larger is the safety stock than with a Q system?