The Cosmopolitan Store Wants to Use a Periodic Review System

Multiple Choice

The Cosmopolitan store wants to use a periodic review system for its basic apparel product. The product has an annual demand of 7,200 units. Their order cost is $75, and their inventory carrying cost is 18% per dollar per year. The cost of each product is $20. The purchase order lead time is 1 week, and the average daily demand is 18 units, with a standard deviation of 4 units. Cosmopolitan would like to maintain a 99% service level.
-A hospital's biomedical repair shop uses a 4-week periodic system to maintain the inventory on the catheter unit repair parts. It uses an average 40 adult catheter units, with a standard deviation of 6 catheter units every 4 weeks. Catheter units aren't the most critical item it carries, but the manager would like to avoid the embarrassment of a stockout at least 95% of the time. What should the restocking level be?

A) 40 cuffs
B) 46 cuffs
C) 50 cuffs
D) 52 cuffs
E) Do not have enough information to answer the question