Proper Inventory Management Practices

Running head: INVENTORY MANAGEMENT
Inventory Management
Name of the Student:
Name of the University:
Author’s Note:

INVENTORY MANAGEMENT
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Table of Contents
Question 1......................................................................................................................2
Question 2......................................................................................................................3
Question 3......................................................................................................................4
Question 4......................................................................................................................5
Question 5......................................................................................................................6
Question 6......................................................................................................................6
Question 7......................................................................................................................8
Question 8......................................................................................................................9
Bibliography.................................................................................................................10

INVENTORY MANAGEMENT
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Question 1
Ansno Particulars Formula Amt
Average Weekly Demand (units) 200
Number of days in a week 5
Number of weeks in a year 50
Annual demand (units) D 10000
Standard Deviation (units) 16
Purchase Price per unit C 12.50$
Supply Lead Time (weeks) L 4
orderingcosts S 40.00$
Carrying Costs H 2.50$
a Optimal Order Cost (EOQ) sqrt((2DS/H)) 565.6854
b SafetyStock SS 74.56
If leadtime isreduced than
Lead time (weeks) L 2
Z(at 99%) Z 2.33
Standard deviation SD 16
Safety Stock SS 52.72188
c Percentage Reduction 29.29%
if standardDeviationisreduced
Lead time (weeks) 4
Z(at 99%) 2.33
Standard deviation 8
Safety Stock 37.28
d Percentage Reduction 50.00%

INVENTORY MANAGEMENT
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Question 2
d. A withdrawal of 15 units from the inventory would not be affecting the investory stock as
the same is still not close to reorder level. Therefore, the business does not need to reorder
unless the withdrawal reaches the reorder point.