Question: IM Systems (Problem 13-32) is considering purchasing monitors from a Canadian manufacturer instead of from a Taiwanese company that would guarantee a lead time of

IM Systems (Problem 13-32) is considering purchasing monitors from a Canadian manufacturer instead of from a Taiwanese company that would guarantee a lead time of eight days. Determine the new reorder point given this lead time and identify the factors that would enter into the decision to change manufacturers.

Problem 13-32

IM Systems assembles microcomputers from generic components. It purchases its colour monitors from a manufacturer in Taiwan; thus, there is a long lead time of 25 days. Daily demand is normally distributed with a mean of 3.5 monitors and a standard deviation of 1.2 monitors.

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