Consider an establishment that works 52 weeks a year and uses an annual interest associated with the
Question:
Consider an establishment that works 52 weeks a year and uses an annual interest associated with the inventory of 25%. One of the products that he works, he purchases from a supplier at $ 18 per unit and sells it for $ 60. If the product runs out, the establishment later delivers it to its customer for a bona fide cost of $ 75 per unit. The fixed cost of ordering this product is $ 135 per order. The time that elapses from when an order is placed until it is received is 7 weeks. The weekly demand for the product follows a normal distribution with an average of 80 and a deviation of 30.
If you need to iterate to find the optimal solution, iterate only once. Keep two significant decimal places in your answers.
What will be the order size and reorder point if you want to minimize average costs? For this system, what would it be in type 2 service level?
What is the order size and reorder point if you want to guarantee that 80% of the demand is met?
Expert Answer:
Calculation of order size and reorder point If 100 of demand is guaranteed EOQ 2DPC where ... View the full answer
