Dachh A distribution company purchases two parts from the same supplier. When the company places an...
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Dachh A distribution company purchases two parts from the same supplier. When the company places an order there is a common procurement cost of $120, in addition to $100 (Product I) and $400 (Product II) of individual procurement costs. Product I has a weekly demand of 250 units with a standard deviation of 40 units, each Product I values $200, target CSL is 94%, and lead time is one month. Product II has a weekly demand of 60 units with a standard deviation of 40 units, each Product II values $1000, target CSL is 99%, and lead time is 3 months. The company uses 26% as the inventory holding rate per year. Assuming each products is individually ordered using periodic review policy, compute T*, M*, and TC of Product II. Dachh A distribution company purchases two parts from the same supplier. When the company places an order there is a common procurement cost of $120, in addition to $100 (Product I) and $400 (Product II) of individual procurement costs. Product I has a weekly demand of 250 units with a standard deviation of 40 units, each Product I values $200, target CSL is 94%, and lead time is one month. Product II has a weekly demand of 60 units with a standard deviation of 40 units, each Product II values $1000, target CSL is 99%, and lead time is 3 months. The company uses 26% as the inventory holding rate per year. Assuming each products is individually ordered using periodic review policy, compute T*, M*, and TC of Product II.
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