Kelly opens an aquarium store in a lively shopping mall and finds business to be booming, but she often stocks out of key items customers want. she decides to experiment with inventory control methods such as using a fixed order quantity (fqs) and/or fixed order period (fps) systems. the fluval 303 pump, a high margin and profitable pump, is one of her best sellers, but it stocks out frequently. she collects the following data about the pump’s sales.
demand = 10 units per week store operates 45 weeks/year
order cost = $30/order lead time = 3 weeks
item cost = $80/pump standard deviation of weekly demand = 4 units
inventory-holding cost = 15% per year desired service level = 90 percent
1. if the current order quantity used by kelly is 20 pumps per order, how much money can she save by adopting an economic order quantity (eoq) policy?

a. less than $50
b. more than $50 but less than or equal to $100
c. more than $100 but less than or equal to $150
d. more than $150

if kelly decides to use a fixed-period system (fps), the fixed-order interval (t) based on store economics is:
a. less than or equal to 5 weeks.
b. more than 5 but less than or equal to 10 weeks.
c. more than 10 but less than or equal to 15 weeks.
d. more than 15 but less than or equal to 20 weeks.