Business Finance, University of California – Irvine Supply chain calculation questions
Description
Given the following data, answer the questions below:
Daily Demand = 275 units
SD of Daily Demand = 44 units
Average inventory units = 2,500 units
Cost of 1 unit = $100
Average inventory value = $250,000
Cost of Goods sold (per year) = $9,900,000
Average Replenishment Cycle (Lead time) = 12 days
SD of Replenishment Cycle = 2 days
(Working) Days per year = 360 days
Current number of warehouses = 16
What is the number of inventory turns?
How much safety stock should the company hold if it wants to ensure a 99% service level?
If the company wants to close 12 of their warehouses, how much inventory should they expect to have afterwards?
If the company is considering adding 4 warehouses to their existing 16, how much inventory should they expect to have afterwardss？
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