10. A product is sold at 40.000 KD/unit. Annually 200 units are sold but the demand...

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10. A product is sold at 40.000 KD/unit. Annually 200 units are sold but the demand pattern is random. Annual inventory holding cost rate is 15%. Ordering cost is 10 KD/order and the demand during lead time follows uniform distribution between 1 and 20 units (inclusive). Determine the followings: a) Economic order quantity. b) If the company is willing to have roughly 2 stock-outs per year, What would be the reorder point? c) What is the probability that the company will have a stock-out in any given cycle? Determine the safety stock and the annual safety stock costs. 10. A product is sold at 40.000 KD/unit. Annually 200 units are sold but the demand pattern is random. Annual inventory holding cost rate is 15%. Ordering cost is 10 KD/order and the demand during lead time follows uniform distribution between 1 and 20 units (inclusive). Determine the followings: a) Economic order quantity. b) If the company is willing to have roughly 2 stock-outs per year, What would be the reorder point? c) What is the probability that the company will have a stock-out in any given cycle? Determine the safety stock and the annual safety stock costs.

Answer rating: 100% (QA)

a The economic order quantity is 200 uni... View the full answer