IM.65 Boeing orders a small part (component) used in many of its wing assemblies. Below is information
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Question:
IM.65 Boeing orders a small part (component) used in many of its wing assemblies. Below is information about this part:
- Cost per box = $500
- Pieces per box = 56
- Daily usage of pieces per day (demand) = 34
- Standard deviation of daily demand = 5
- Purchase delivery time (in days) = 20
- Desired service level = 88%
- Ordering costs (administrative) = $380
- Annual interest earned in cash = 6%
What should the safety stock be for this part (in pieces, not in boxes)? (Show your answer to two decimal places.)
What should the reorder point be (in parts, not in cases)? (Show your answer to two decimal places.)
What is the economic order quantity (in parts, not in boxes)? (Show your answer to the nearest whole number .)
Expert Answer:
To calculate the safety stock reorder point and economic order quantity EOQ we can use the f... View the full answer
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