A retailer buys TVs from a wholesaler and sells them to customers. The retailer incurs an ordering
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A retailer buys TVs from a wholesaler and sells them to customers. The retailer incurs an ordering cost of $370 per order when he places the order. The annual holding cost for a TV is $96. The retailer follows a 95% fill rate (service level). The retailer wants to find the order quantity, reorder level, and average inventory with safety stock. The following table summarizes the demand and the lead time.
Month | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug |
Sales (in units) | 149 | 159 | 167 | 170 | 162 | 175 | 114 | 188 | 154 |
Leadtime(weeks) | 3 | 1 | 4 | 3 | 2 | 4 | 4 | 1 | 3 |
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