eContinuous Review:
Practice Problems:
1.Walmart sells 4500 bottles of 2% Milk a week. They want to review their inventory policy to cut costs. The 2% Milk bottle sells for $1.20. Walmart currently orders 60,000 bottles at a time and the cost to place an order is $100. The lead time is 1 week and holding cost is $1.00 per unit per year. What is the Economic Order Quantity and ROP?
What is the total cost of the current policy? ?
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What is the total cost of the new EOQ policy? ?
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What is the time between orders for the new policy?
2.Walmart (in a continuation of problem 1 above) has recently hired a Supply Chan intern. He is tasked to account for the uncertainty in Demand and Lead times. He calculated the standard

How much Safety Stock is needed?
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What is the new ROP?
What is the new total cost of the new inventory policy including safety stock? ?
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3.The Academy store in Katy sells 750 pairs of sports shoes a week. They want to review their inventory policy. The average selling price for shoes is $120. Academy currently orders 2000 shoes at a time and the cost to order is $1000. The lead time on the order is 2 weeks and holding cost is $125 per unit per year. What is the Economic Order Quantity and ROP?