The Philby hotel plans to do the beverage purchasing for the property using the perpetual inventory method.
She wants to reorder the items in the following list approximately every two weeks and plans to use a
safety factor of 50% for calculating par stock and reorder point. Deliver requires 6 days.
Given the daily usage figures listed here, determine par stock, reorder point, and reorder quantity for each item
Item Daily usage
Given Information :
Name of the company : The philby hotel
Plans : Beverage purchasing for the property suing the perpetual inventory method.
Strategy : Reorder the items
Reorder time : Every two weeks
Safety factor : 50 %
Lead time : 6 days
1.In column 3: 2 weeks(14 days ) have been considered . So these days multiplied by daily usage.
2.Saftey factor column no 4 taken as 50 % on two weeks requirement.
3.Total Stock: Two weeks requirement + safety stock
4.Reorder point is calculated on 6 days lead time.
5.Reorder quantity is calculated on 6 days lead time production + safety stock.