7. Sam's Cat Hotel operates 52 weeks per year, 5 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 = 95 bags/week≻Order cost = $57/order≻Annual holding cost = 30 percent of cost≻Desired cycle-service level=98 percent≻Lead time = 1 week(s) (5 working days)≻Standard deviation of weekly demand = 20 bags≻Current on-hand inventory is 350 bags, with no open orders or backorders.d. The store currently uses a lot size of 490 bags (i.e., Q=490). What is the annual holding cost of this policy? (Enter your response rounded to two decimal places.) and (Enter your response rounded to two decimal places.) **select the correct multiple choice answer**e. What would be the annual cost saved by shifting from the 490-bag lot size to the EOQ?(Enter your responses rounded to two decimal places.) perates 52 weeks per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.00on is available about these bags. Refer to the standard normal table for z-values.95 bags/week= $57/order- XData TableThe table below shows the total area under the normal curve for a point that is Z standard deviations to theright of the mean.0.000.010.020.030.040.050.060.070.080.090.5000 0.5040 0.5080 0.5120 0.5160 0.5199 0.5239 0.5279 0.5319 0.53590.5398 0.54380.5478 0.5517 0.5557 0.5596 0.5636 0.5675 0.57140.57540.20.00.10.5793 0.5832 0.5871 0.5910 0.5948 0.5987 0.6026 0.6064 0.6103 0.61410.6179 0.6217 0.6255 0.6293 0.6331 0.6368 0.6406 0.6443 0.6480 0.65170.6554 0.6591 0.6628 0.6664 0.6700 0.6736 0.6772 0.6808 | 0.6844 | 0.68790.6915 0.6950 0.6985 0.7019 0.7054 0.7088 0.71230.7157 0.7190 |0.72240.7258 0.7291 0.7324 0.7357 0.7389 0.7422 0.74540.7486 0.7518 0.75490.7580 0.7612 0.7642 0.7673 0.77040.7734 0.7764 0.7794 | 0.7823 0.78520.80.30.40.50.60.70.7881 0.7910 0.7939 0.7967 0.7996 0.8023 0.8051 0.8079 0.8106 0.81330.90.8159 0.8186 0.8212 0.8238 0.8264 0.8289 0.8315 0.8340 0.8365 0.83891.00.8413 0.8438 0.8461 0.8485 0.8508 0.8531 0.8554 0.8577 0.8599 0.86210.8643 0.8665 0.8686 0.8708 0.8729 0.8749 0.8770 0.8790 0.8810 0.8830re1.11.2in0.8849 0.8869 0.8888 0.8907 0.8925 | 0.8944 0.8962 0.8980 | 0.8997 0.90151.30.9032 0.9049 0.9066 0.9082 0.90990.9115 0.9131 0.9147 0.9162 0.91771.40.9192 0.9207 0.9222 0.9236 0.9251 |0.9265 0.9279 0.9292 |0.9306 0.93190.9332 0.9345 0.9357 0.9370 0.9382 0.9394 0.9406 0.9418 0.9430 0.94410.9452 0.9463 0.9474 0.9485 0.9495 0.9505 0.9515 0.9525 0.9535 0.95450.9554 0.9564 0.9573 | 0.9582 0.9591 0.9599 0.9608 0.9616 0.9625 0.96330.9641 0.9649 0.9656 0.9664 0.96710.9678 0.9686 0.9693 0.9700 0.97060.9713 0.9719 0.9726 0.9732 0.9738 0.9744 0.9750 0.9756 0.9762 0.9767Ja1.5eri1.61.7in1.81.9n2.00.9773 0.9778 0.9783 0.9788 0.9793 0.9798 0.9803 0.9808 0.9812 0.98172.10.9821 0.9826 0.9830 0.9834 0.9838 | 0.9842 0.9846 0.9850 0.9854 0.98570.9861 0.9865 0.9868 0.9871 |0.9875 0.9878 0.9881 0.9884 0.9887 0.98902.32.20.9893 0.9896 0.9898 0.9901 0.9904 | 0.9906 0.9909 0.9911 0.9913 0.9916an2.40.9918 0.9920 0.9922 0.9925 0.9927 0.9929 0.9931 0.9932 0.9934 0.99362.50.9938 0.9940 0.9941 0.9943 0.9945 0.9946 0.9948 0.9949 0.9951 0.99520.9953 0.9955 0.9956 0.9957 0.9959 0.9960 0.9961 0.9962 0.9963 0.99640.9965 0.9966 0.9967 0.9968 0.9969 0.9970 0.99710.9972 0.9973 0.99740.9974 0.9975 0.9976 0.9977 0.9977 0.9978 0.99790.9980 0.9980 0.9981be2.62.7din2.82.90.9981 0.9982 0.9983 0.9983 0.9984 0.9984 0.99850.9985 0.9986 0.99863.0eri0.9987 0.9987 0.9987 0.9988 0.9988 0.9989 0.9989 0.9989 0.9990 0.99903.10.9990 0.9991 0.9991 0.9991 0.9992 0.9992 0.99920.9992 0.9993 0.99930.9993 0.9993 0.9994 0.9994 0.9994 0.9994 0.99940.9995 0.9995 0.99953.3n's3.20.9995 0.9995 0.9995 0.9995 0.9996 0.9996 0.9996 0.9996 0.9996 0.9997PrintDone Sam's Cat Hotel operates 52 weeks per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.00 per bag. Thefollowing information is available about these bags. Refer to the standard normal table for z-values.Demand = 95 bags/week Order cost = $57/orderAnnual holding cost = 30 percent of cost Desired cycle-service level = 98 percentLead time = 1 week(s) (5 working days)Standard deviation of weekly demand = 20 bags Current on-hand inventory is 350 bags, with no open orders or backorders.a. What is the EOQ?Sam's optimal order quantity isMONbags. (Enter your response rounded to the nearest whole number.)What would be the average time between orders (in weeks)?The average time between orders isweeks. (Enter your response rounded to one decimal place.)b. What should R be?The reorder point isbags. (Enter your response rounded to the nearest whole number.)c. An inventory withdrawal of 10 bags was just made. Is it time to reorder?ItV time to reorder.d. The store currently uses a lot size of 490 bags (i.e., Q= 490). What is the annual holding cost of this policy?uring theThe annual holding cost is $ (Enter your response rounded to two decimal places.)e assignmWhat is the annual ordering cost?The annual ordering cost is $ (Enter your response rounded to two decimal places.)Without calculating the EOQ, how can you conclude from these two calculations that the current lot size is too large?le ChoiceO A. There is not enough information to determine this.O B. When Q = 490, the annual holding cost is larger than the ordering cost, therefore Q is too large.O C. When Q = 490, the annual holding cost is less then the ordering cost, therefore Q is too small.rical ProlO D. Both quantities are appropriate.e. What would be the annual cost saved by shifting from the 490-bag lot size to the EOQ?The annual holding cost with the EOQ is $ (Enter your response rounded to two decimal places.)The annual ordering cost with the EOQ is S (Enter your response rounded to two decimal places,)Krajewski,Therefore, Sam's Cat Hotel saves S by shifting from the 490-bag lot size to the EOQ. (Enter your response rounded to two decimal places.)

Question

7. Sam's Cat Hotel operates 52 weeks per year, 5 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 = 95 bags/week≻Order cost = $57/order≻Annual holding cost = 30 percent of cost≻Desired cycle-service level=98 percent≻Lead time = 1 week(s) (5 working days)≻Standard deviation of weekly demand = 20 bags≻Current on-hand inventory is 350 bags, with no open orders or backorders.d. The store currently uses a lot size of 490 bags (i.e., Q=490). What is the annual holding cost of this policy? (Enter your response rounded to two decimal places.) and (Enter your response rounded to two decimal places.) **select the correct multiple choice answer**e. What would be the annual cost saved by shifting from the 490-bag lot size to the EOQ?(Enter your responses rounded to two decimal places.) perates 52 weeks per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.00on is available about these bags. Refer to the standard normal table for z-values.95 bags/week= $57/order- XData TableThe table below shows the total area under the normal curve for a point that is Z standard deviations to theright of the mean.0.000.010.020.030.040.050.060.070.080.090.5000 0.5040 0.5080 0.5120 0.5160 0.5199 0.5239 0.5279 0.5319 0.53590.5398 0.54380.5478 0.5517 0.5557 0.5596 0.5636 0.5675 0.57140.57540.20.00.10.5793 0.5832 0.5871 0.5910 0.5948 0.5987 0.6026 0.6064 0.6103 0.61410.6179 0.6217 0.6255 0.6293 0.6331 0.6368 0.6406 0.6443 0.6480 0.65170.6554 0.6591 0.6628 0.6664 0.6700 0.6736 0.6772 0.6808 | 0.6844 | 0.68790.6915 0.6950 0.6985 0.7019 0.7054 0.7088 0.71230.7157 0.7190 |0.72240.7258 0.7291 0.7324 0.7357 0.7389 0.7422 0.74540.7486 0.7518 0.75490.7580 0.7612 0.7642 0.7673 0.77040.7734 0.7764 0.7794 | 0.7823 0.78520.80.30.40.50.60.70.7881 0.7910 0.7939 0.7967 0.7996 0.8023 0.8051 0.8079 0.8106 0.81330.90.8159 0.8186 0.8212 0.8238 0.8264 0.8289 0.8315 0.8340 0.8365 0.83891.00.8413 0.8438 0.8461 0.8485 0.8508 0.8531 0.8554 0.8577 0.8599 0.86210.8643 0.8665 0.8686 0.8708 0.8729 0.8749 0.8770 0.8790 0.8810 0.8830re1.11.2in0.8849 0.8869 0.8888 0.8907 0.8925 | 0.8944 0.8962 0.8980 | 0.8997 0.90151.30.9032 0.9049 0.9066 0.9082 0.90990.9115 0.9131 0.9147 0.9162 0.91771.40.9192 0.9207 0.9222 0.9236 0.9251 |0.9265 0.9279 0.9292 |0.9306 0.93190.9332 0.9345 0.9357 0.9370 0.9382 0.9394 0.9406 0.9418 0.9430 0.94410.9452 0.9463 0.9474 0.9485 0.9495 0.9505 0.9515 0.9525 0.9535 0.95450.9554 0.9564 0.9573 | 0.9582 0.9591 0.9599 0.9608 0.9616 0.9625 0.96330.9641 0.9649 0.9656 0.9664 0.96710.9678 0.9686 0.9693 0.9700 0.97060.9713 0.9719 0.9726 0.9732 0.9738 0.9744 0.9750 0.9756 0.9762 0.9767Ja1.5eri1.61.7in1.81.9n2.00.9773 0.9778 0.9783 0.9788 0.9793 0.9798 0.9803 0.9808 0.9812 0.98172.10.9821 0.9826 0.9830 0.9834 0.9838 | 0.9842 0.9846 0.9850 0.9854 0.98570.9861 0.9865 0.9868 0.9871 |0.9875 0.9878 0.9881 0.9884 0.9887 0.98902.32.20.9893 0.9896 0.9898 0.9901 0.9904 | 0.9906 0.9909 0.9911 0.9913 0.9916an2.40.9918 0.9920 0.9922 0.9925 0.9927 0.9929 0.9931 0.9932 0.9934 0.99362.50.9938 0.9940 0.9941 0.9943 0.9945 0.9946 0.9948 0.9949 0.9951 0.99520.9953 0.9955 0.9956 0.9957 0.9959 0.9960 0.9961 0.9962 0.9963 0.99640.9965 0.9966 0.9967 0.9968 0.9969 0.9970 0.99710.9972 0.9973 0.99740.9974 0.9975 0.9976 0.9977 0.9977 0.9978 0.99790.9980 0.9980 0.9981be2.62.7din2.82.90.9981 0.9982 0.9983 0.9983 0.9984 0.9984 0.99850.9985 0.9986 0.99863.0eri0.9987 0.9987 0.9987 0.9988 0.9988 0.9989 0.9989 0.9989 0.9990 0.99903.10.9990 0.9991 0.9991 0.9991 0.9992 0.9992 0.99920.9992 0.9993 0.99930.9993 0.9993 0.9994 0.9994 0.9994 0.9994 0.99940.9995 0.9995 0.99953.3n's3.20.9995 0.9995 0.9995 0.9995 0.9996 0.9996 0.9996 0.9996 0.9996 0.9997PrintDone Sam's Cat Hotel operates 52 weeks per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.00 per bag. Thefollowing information is available about these bags. Refer to the standard normal table for z-values.>Demand = 95 bags/week> Order cost = $57/order>Annual holding cost = 30 percent of cost> Desired cycle-service level = 98 percent>Lead time = 1 week(s) (5 working days)>Standard deviation of weekly demand = 20 bags> Current on-hand inventory is 350 bags, with no open orders or backorders.a. What is the EOQ?Sam's optimal order quantity isMONbags. (Enter your response rounded to the nearest whole number.)What would be the average time between orders (in weeks)?The average time between orders isweeks. (Enter your response rounded to one decimal place.)b. What should R be?The reorder point isbags. (Enter your response rounded to the nearest whole number.)c. An inventory withdrawal of 10 bags was just made. Is it time to reorder?ItV time to reorder.d. The store currently uses a lot size of 490 bags (i.e., Q= 490). What is the annual holding cost of this policy?uring theThe annual holding cost is $ (Enter your response rounded to two decimal places.)e assignmWhat is the annual ordering cost?The annual ordering cost is $ (Enter your response rounded to two decimal places.)Without calculating the EOQ, how can you conclude from these two calculations that the current lot size is too large?le ChoiceO A. There is not enough information to determine this.O B. When Q = 490, the annual holding cost is larger than the ordering cost, therefore Q is too large.O C. When Q = 490, the annual holding cost is less then the ordering cost, therefore Q is too small.rical ProlO D. Both quantities are appropriate.e. What would be the annual cost saved by shifting from the 490-bag lot size to the EOQ?The annual holding cost with the EOQ is $ (Enter your response rounded to two decimal places.)The annual ordering cost with the EOQ is S (Enter your response rounded to two decimal places,)Krajewski,Therefore, Sam's Cat Hotel saves S by shifting from the 490-bag lot size to the EOQ. (Enter your response rounded to two decimal places.)

Accepted Answer

Answered: Image /qna-images/answer/a683193d-8596-46fe-a2cf-e227ac052da9.jpg