Value Electronics has a yearly demand of 100,000 units for their tablet. The order processing cost per

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Value Electronics has a yearly demand of 100,000 units for their tablet. The order processing cost per order is $2,000, and inventory holding cost is $100/item/year. They have opted for the reorder point system, and it has two options for transportation: by truck and by rail. Truck transportation takes 1 week, while rail transportation takes 2 weeks of lead time. Truck transportation costs $2 per tablet, while by rail the transportation cost is $1 per tablet. It is the policy of Value Electronics to hold enough inventories to cover demand for twice the lead time.

Calculate the safety stock for the rail scenario.

Posted Date: May 11, 2024 04:34 AM

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Value Electronics has a yearly demand of 100,000 units for their tablet. The order processing cost per

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To calculate the safety stock for the rail scenario we need to consider the lead time demand and des... View the full answer

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