# Question

For the data in problem 11:

In problem 11

Average annual sales = 600 tires

Ordering cost = $40 per order

Carrying cost = 25 percent per year

Item cost = $50 per tire

Lead time = 4 days

Standard deviation of daily demand = 1 tire

a. Calculate the annual turnover as a function of service level.

b. If sales were to increase by 50 percent, what would happen to the turnover at a 95 percent service level?

In problem 11

Average annual sales = 600 tires

Ordering cost = $40 per order

Carrying cost = 25 percent per year

Item cost = $50 per tire

Lead time = 4 days

Standard deviation of daily demand = 1 tire

a. Calculate the annual turnover as a function of service level.

b. If sales were to increase by 50 percent, what would happen to the turnover at a 95 percent service level?

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