1. Starwood Hotel and Resort operates 52 weeks per year, 7 days per week. It purchases kitty litter for $11.70 per bag. The following information is available: Demand=90 bags/weeks Order cost= $54/order Unit holding cost=27 percent of cost Lead time= 3 weeks Current on-hand inventory is 320 bags, with 120 schedule receipt but no back order.
Requirement:
a. Considering the information provided determine the EOQ.
b. When should a new order be placed?
c. Determine Annual Inventory cost considering EOQ as lot size.