Click Pix, a large discount camera store in New York City is open six days a week,
Question:
Click Pix, a large discount camera store in New York City is open six days a week, 52 weeks a year. The store recently began selling PS58 model Sonic camcorders, which cost $520.00 each and retail for $649.99. Sales average 60 units per week. The cost to place an order with Sonic is $90 and delivery time is seven business days. Click Pix uses an 18% annual maintenance cost rate for camcorders.
Additionally, the store manager wants to have safety stock since this is a new product and the demand is not fully understood. The store estimates that the delivery time demand follows a normal distribution with a mean of 70 units and a standard deviation of 15 units. Ideally, the store manager is trying to achieve a 90% service level.
Since there are a number of questions associated with this problem, it is highly recommended that you solve it on scrap paper (or Excel) that you can refer to
The order point is:
70
60