For the data given in problem 8 In problem8 Average monthly sales
For the data given in problem 8:
In problem8
Average monthly sales = 120 units
Ordering cost = $25 per order
Carrying cost = 35 percent per year
Item cost = $300 per unit
Lead time = 4 days
Standard deviation of daily demand = .2 unit
Working days per year = 250
a. Design a P system for this phone with a 92 percent service level.
b. Compare the inventory investments required for the P and Q systems (from problem 8) for various values of service level.
c. Why does the P system require a higher inventory investment?
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